Tag Archives: Luxury Real Estate
Canada’s housing market drawing the big-money crowd
Sotheby’s finds more foreign buyers looking to Canada as a safe and stable place to live
Susan Pigg – Toronto Star
Sotheby’s International Realty is seeing a surge in demand from wealthy Syrians, Egyptians and Europeans looking for a safe and relatively stable place to park their millions — Canada’s softening real estate market.
There has been an uptick in “very significant transactions” in tony areas like Oakville and North Toronto by Europeans, many with young families who originally had planned to settle in the U.S. but fell in love with Canada instead, says Sotheby’s Canada CEO Ross McCredie.
At the same time, Montreal’s exclusive Westmount area has become top of the real estate wish list for high-net worth Syrians and Egyptians looking for a safe haven for their money and families, he added.
Increasingly, many of these deals — especially those over $10 million — aren’t even showing up in MLS sales tallies because of buyers seeking the privacy afforded by private or exclusive deals, or finalized under the cloak of a corporate purchase, McCredie noted.
“The lack of inventory is a big problem in the high-end market,” so agents are having to find their own properties rather than look to the MLS system, said Andy Taylor of Sotheby’s Toronto office, which has done more international business in the last 18 months than in the last six years.
“What we are seeing is very wealthy high-net worth individuals who see the Canadian real estate market as undervalued in their world, in terms of what else they are looking at and what else they own,” added McCredie.
“They see this as a stable country. They love our currency. And they see cities that have changed dramatically in the last 20 years and are much more appealing to an international buyer.”
In a bid to better understand who is buying, why and where, the high-end realty company — which just launched into the Canadian market eight years ago — undertook a survey of its top agents in over a dozen key cities and produced what it calls its first Top Tier Trends Report.
While there has been a softening in demand for homes over $2 million, especially in Vancouver and Toronto, since housing sales began their double-digit slump last summer, Canada remains firmly fixed on the radar for the growing number of millionaires and billionaires from Shanghai to Sydney, notes the report released Thursday.
Wealthy Canadians, of course, remain the dominant players in this niche market, but in Toronto, Vancouver and Montreal they’ve been facing more competition, particularly in the last five years, from would-be Chinese, Russian, British and American buyers, it says.
Sotheby’s has seen heightened interest from Europeans, largely in Toronto real estate, since the euro crisis, says McCredie, adding that about 25% of its luxury sales in the Toronto area are to foreigners from the U.S., China, Russia, the Middle East and India.
Its percentage of foreign buyers is closer to 40% in Vancouver and 50% in Montreal, notes the report, according to Sotheby’s agents surveyed for the study.
Most are looking for iconic, spacious homes with very high-end finishes, but others are willing to pay what it takes just to get a great location — even if it means pumping millions more into the place in renovations, said McCredie.
Just six weeks ago, Sotheby’s recorded a record $4 million sale — the highest price ever paid for a semi-detached house in Toronto.
The 4,000-square-foot semi is in Yorkville. The buyer was local, but 30% of those looking at the well-appointed home were international buyers, said Taylor.
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Contact the Jeffrey Team for more information – 416-388-1960
Laurin & Natalie Jeffrey are Toronto Realtors with Century 21 Regal Realty.
They did not write these articles, they just reproduce them here for people
who are interested in Toronto real estate. They do not work for any builders.
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Canadian luxury real estate set for a boost from the newly rich
Richard Blackwell – The Globe and Mail
Dramatically growing numbers of mobile, wealthy individuals around the world promise to push up demand for luxury real estate, making high-end properties in Canada’s biggest cities increasingly valuable.
In 10 years, there will be 50% more people on the planet with more than $30-million (U.S.) in net assets – or about 286,000 – according to a new report from British-based real estate consultancy Knight Frank. Emerging markets in Asia and Latin America will see the most dramatic growth, with China’s wealthy population expected to more than double by 2022.
In Canada, the numbers in that category will rise by about 35% over the decade to roughly 6,640, the study says. The largest concentration in Canada will be in Toronto, which currently ranks 20th among global cities for the number of high-net-worth individuals.
One of the consequences of the growing number of wealthy people is that there will be an increasing demand for high-end real estate, even though the supply of luxury properties will remain virtually static, the report suggests. That means the most popular cities for the wealthy – New York and London are at the top of the list – will see increasing upward pressure on prices.
For Canada’s key luxury markets, particularly Vancouver, that will mean a long-term jump in prices for high-end real estate, despite recent softness.
The Vancouver region’s premium real estate market took a breather last year, although sales of properties valued at $3-million or higher remained well above levels of a decade ago.
The current weakness in Vancouver’s luxury market “is probably a temporary thing,” Andrew Hay, head of global residential property at Knight Frank, said in an interview from London.
The amount of money pouring into high-end real estate in any specific location shifts as wealthy people look for new places to put their funds, currency rates fluctuate, and governments put in place measures to cool overheated real estate markets, he said. “There is an increasing amount of money waiting to be spent, but it is better informed and changes direction quicker than ever before.”
While Vancouver is clearly on the radar screen for wealthy Chinese investors, they will assess other options such as Sydney, London or New York, depending on the situation at any particular time, he said.
Still, over the long term, Vancouver’s attractive attributes will draw even more international wealth and put upward pressure on prices of luxury properties, Mr. Hay said. Over all, he predicted, Canada will become increasingly popular as a destination for international wealth along with New Zealand and Australia. That’s because of “the rule of law, strong domestic balance sheets, political stability, and [the fact that] they are lovely places to live.”
Vancouver is definitely the most favoured Canadian location for the newly wealthy, he said, outstripping Toronto or Montreal.
Dan Scarrow, vice-president of corporate strategy at Macdonald Realty in Vancouver, said some of the high-end market in that city is being driven by immigrant investors, including many originally from China. “It’s not like there’s a group of investors who are sitting in China and are playing around with the Vancouver real estate market. That is not happening, but there are many Chinese buyers who are already here or will eventually become Canadian citizens,” he said.
Don Campbell, a senior analyst at Real Estate Investment Network in Vancouver, noted that the pattern of home price growth in Vancouver closely tracks the movements of Chinese GDP – an indication that Chinese investors have a considerable influence on the Vancouver market .
Mr. Campbell said the overall increase in the number of wealthy individuals in Canada will also be good for premium real estate markets outside the biggest cities. There is new wealth being created by the oil business and other industries, and many of the newly rich aren’t in Toronto or Vancouver. “You are starting to see the wealthy not being concentrated in the heart of old Toronto and [Vancouver's] West Van and British Properties,” he said, but also in Calgary, Edmonton, Saskatoon and even in Atlantic Canada. There is now demand for luxury accommodation in all those places, he said.
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Contact the Jeffrey Team for more information – 416-388-1960
Laurin & Natalie Jeffrey are Toronto Realtors with Century 21 Regal Realty.
They did not write these articles, they just reproduce them here for people
who are interested in Toronto real estate. They do not work for any builders.
—————————————————————————————————–
Incoming search terms
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Shane Baghai: A founding father of luxury condos
Ryan Starr – Toronto Star
Shane Baghai feels that far too many Toronto developers these days are misusing and abusing the word “luxury” in the marketing of their condos, often attaching the label to banal projects that are anything but.
“Luxury is a misleading term and I see it being used very loosely all over the place,” says Baghai, 63, the chief of Baghai Development Ltd. and the Baghai Group of Companies, and a founding father of Toronto’s luxury condo market.
“I think the term is being used by (builders) who either don’t have proper branding in place or don’t have a history of high-end quality.”
By contrast, Baghai, who has built an empire of more than 3,000 luxury condo units and 1,200 high-end custom homes over five decades in the business, has established a brand that is synonymous with true luxury real estate in Toronto.
The way Baghai sees it, genuine luxury real estate is determined by three factors:
• The home must have the “best possible workmanship and materials money can buy.”
• It needs the most advanced and cutting-edge technology.
• The real estate must have an element of rarity. “It’s like a Rolls Royce or Bentley,” says Baghai. “They’re not plentiful and that rarity has the connotation of luxury.”
It’s why Baghai doesn’t build an excessive number of projects at any given time, preferring to develop several hundred on average each year. “Otherwise it would go against my philosophy.”
(He is also an active philanthropist who has contributed funds to University of Toronto, Hospital for Sick Children and Sunnybrook Health Science Centre, among others.)
Out to pasture
Baghai has been working in the developmnent business since the early 1970s.
In recent years, however, he’s gone out to pasture. Well, not exactly. He’s taken a brief breather from housing development to focus on growing his new farming and restaurant business.
At Paradise Farms, Baghai’s farm in Caledon, hundreds of beef cattle that have been naturally raised and are free of artificial growth hormones roam.
Baghai purchased the farm seven years ago after his wife Marnie was diagnosed with breast cancer (she survived the scare and is today in good health, Baghai says).
During his wife’s treatment, specialists advised her to refrain from indulging in North American beef, “because most animals here are injected or implanted with artificial growth hormones to gain weight faster,” Baghai notes.
The solution seemed clear: “I bought the farm.”
Paradise Farms, which is run by a professional farm manager, has been up and running for four years and is supplying a restaurant that Baghai recently opened at the base of his St. Gabriel community on Sheppard Ave. E. and Bayview Ave.
The eatery, Paradise Farms Café, has been a success so far and Baghai is planning to open a second one in Erin, near where his farm is located. “In the next five years we’re hoping to expand to about 30 stores in the GTA.”
A ‘miracle child’
Baghai was born in Iran in 1949. “I was a miracle child,” he says. “My dad was 60 when I was born; my mom was post-menopausal.”
When he was 12, his parents shipped him off to boarding school in England. He went on to graduate from the City & Guilds of London Institute with a degree in mechanical engineering.
He moved to Canada in 1973 and within a few years had built up a thriving high-end custom-home business. By the early 1980s, he was doing about 100 custom homes a year. “That put me on the map as a notable builder,” he says.
Amid depreciating real estate values in the mid to late ’80s, Baghai noticed that many of his customers who had built large homes were “selling them in a hurry.”
“And I saw that the people who were moving down from their palatial homes would experience some kind of embarrassment that they couldn’t afford the large home anymore.
“But it wasn’t that they couldn’t sustain a lavish lifestyle, this was simply a change in lifestyle,” he says.
So Baghai started building condos that would give these move-down buyers a high-end alternative to their luxurious detached homes.
Erickson a mentor
He built his first condo project in 1990, in the middle of an epic recession. The project, Water Garden, at Bayview Ave. and Finch Ave. E., was designed by noted architect Arthur Erickson, whom Baghai cites as a mentor.
“I adored him,” he says. “I learned more from Arthur in two years than I learned from any of my other consultants and designers.”
Baghai continued developing high-end condo projects throughout the economic malaise of the early ’90s, primarily focusing his efforts in North York.
His company maintained a relatively steady pace of construction in the ensuing decades, building an average of 500 units a year between 2000 and 2009, when he temporarily put the development operation on hold.
Baghai’s most recent projects include St. Gabriel Manor, currently under construction along Sheppard Ave. E.; and The Residences of Avondale, a recently completed 27-storey building near Yonge St. and Sheppard Ave.
While he’s taken time off to focus on farming and other development projects, Baghai insists he’s not finished with high-end condos.
“I’m looking for the right opportunity,” he says, noting that land prices have gotten out of hand. “I think there will be a time when land will become hopefully more affordable.”
—————————————————————————————————–
Contact the Jeffrey Team for more information – 416-388-1960
Laurin & Natalie Jeffrey are Toronto Realtors with Century 21 Regal Realty.
They did not write these articles, they just reproduce them here for people
who are interested in Toronto real estate. They do not work for any builders.
—————————————————————————————————–
Incoming search terms
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