As the real-estate market in Canada continues its record-setting recovery, the market for high-end homes is surging.
The country's richest residents - as well as millionaires from countries such as China and the United Kingdom - are turning to property to provide a safe haven for their money because the market is seen as a stable place to park cash as the global economy recovers from a deep recession.
Attributing the upswing in sales to "improved economic performance, increased personal wealth, immigration and foreign investment," ReMax Canada said in a report Monday that sales for so-called luxury homes broke records in nine of the 13 regions examined in the first quarter of the year.
"It's an astounding recovery compared to last year when people just slammed on the brakes," said Michael Polzler, executive vice-president and regional director of ReMax for Ontario and Atlantic Canada.
The brokerage's definition of a luxury home varies by market, from $400,000 in St. John's to $2-million in Greater Vancouver. The amount is usually determined by looking at the top 1-to-5 per cent of sales in any given market.
While there are no statistics available to confirm the presence of high-end buyers from out of the country, anecdotal evidence from real estate brokerages across the country is abundant. Century 21 recently launched a Chinese version of its website to help Asian buyers find Canadian residential properties and Realtor.ca - the hub for listings on the Canadian Real Estate Association's Multiple Listing Service - now gets almost 1 per cent of its traffic from China.
"There is no doubt a great deal of the demand is coming from mainland China," said Ross McCredie, president of Sotheby's International Realty Canada, who has also been fielding calls from prospective buyers in the European Union and Mexico. "The Chinese are the people shopping at above $5-million."
Canada's market has rebounded strongly from the recession, with average sale prices up almost 20 per cent. But on a global scale, prices here are still relatively low - especially for high-end properties, which realtors said are selling for about the same price as they were in 2007.
And while Canada's rapid recovery - it posted a 5.2 per cent year-over-year gain in 2009 - stoked fears of a housing bubble even as unemployment climbed higher, other markets have been far frothier.
Over the same time period, a survey by Knight Frank LLP found prices in Hong Kong gained 27.6 per cent, followed by China at 25.1 per cent, Israel at 21.3 per cent, and Australia at 13.6 per cent.
Canada was 12th on the list, just behind South Africa and a smidge ahead of Austria.
That has drawn international attention to homes such as the Montreal mansion being sold by real estate agent Cyrille Girard. The house has seven bedrooms, five bathrooms and a heated indoor pool. It also features something its owner didn't have last year - interest from buyers willing to pay the $27-million asking price.
Mr. Girard - an agent with Sotheby's International Realty Quebec - only listed the 41,000-square-foot house Monday. Two interested buyers have already booked appointments to tour the lakefront property, and he considers them real leads to buy what is currently Canada's priciest listing.
"One is flying in from out of the country, though I don't want to say where because these things can be delicate," he said. "There is a great deal of interest because prices in Canada are seen as reasonable compared to other places in the world."
But while buyers have returned from their self-imposed exile, the boom in luxury housing has taken on a different tone than the broader market because buyers are willing to take time to explore their options, since there are plenty of listings and relatively few would-be owners.
Phil Soper, chief executive officer of Brookfield Real Estate Services, said there's also no rush to buy because the homes are no longer looked at for their investment value.
"Those buying these homes are typically financially sophisticated and there aren't too many who will believe we're in for several years of highly appreciating values," he said. "They see today's prices as reasonable, and don't really think prices will fall very much."