Canadian Luxury Market Booms Despite Sagging US Sales

Despite the American market lagging far behind in construction a few select markets (Toronto, Vancouver, etc.) are seeing a big boom in construction. Lower interest rates are prompting more and more people to stay in the country and buy at home – while many still dream of that Florida summer home they can get at a steal, interest rates remain too high for many to seriously consider investing. For years the two markets have been traditionally tethered to one another (especially with luxury real estate and homes for sale), so as long as the US keeps its interest rates down Canada will most likely follow suit.

One Third of Cranes in Canada are in the GTA

Almost one third of all construction cranes in operation in Canada today are in the Greater Toronto Area – working hard to keep up with the condo booms that are keeping the real estate market moving at a quick pace. While projections are great for most major markets, the problem with keeping the ball rolling will always be affordability. If buyers aren’t able to find cheap entry level homes or even luxury homes, they will be forced into the cut throat rental market. With the rental market’s prices increasing much more slowly than the real estate market, it’s a recipe for disaster.

100,000 New Immigrants Moving to GTA

Each year 100,000 new immigrants arrive to the GTA alone, not to mention the tens of thousands of people flowing into BC to buy homes. Nova Scotia has the slowest rate of growth and many people are searching for new homes. With the demand constantly rising construction is following close behind. You’ll notice that with more homes going to buyers instead of renters, there are is a big void. Even if a renter needs a shorter term rental they’ll still have to face fierce competition. This means that for at least the next two years the Canadian construction industry will keep booming.

9% a Year Jump Won’t Last Forever

For over the last two years we’ve seen unprecedented jumps in the price of housing – but it won’t last forever. Even with the slowdown in 2012 prices rose by almost 9% in the GTA alone, 6% in Vancouver and more. It’s important to get in while the getting is good. You don’t want to end up with a property in free fall – that’s why more and more property owners and investors are turning to renting their properties instead of trying to buy and sell again.

Either way, the luxury real estate market and single family home market look good for the next couple years. As long as they both do so, there are many good years ahead.

The Goodale Miller Team is the #1 team in Canada for Century 21 8 years running. Specializing in Oakville luxury real estate including Lakefront homes, infill building lots, condominiums and more. Visit http://www.goodalemillerteam.com/ for more information today!