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Luxury market to rebound
Vancouver is poised to reclaim its global bragging rights for luxury real estate.
In Vancouver, of course, luxury doesn’t just mean pricey, given that almost everything there is high-priced. In this case, prime means the top 5 per cent of the residential real estate market.
Knight Frank’s new 2019 forecast for prime housing puts Vancouver in the No. 5 spot, with a projected price increase of 3 per cent.
Madrid, Berlin and Paris shared the No. 1 spot, with Miami ranking fourth. Just below Vancouver were Los Angeles and Sydney, at 2 per cent, and Geneva, Melbourne and London, at 1 per cent, to round out the top 10.
Consider that a year ago, the consulting group’s 2018 forecast put Vancouver in 13th spot, with a projected price decline of 2.5 per cent in luxury housing.
And its look at the third quarter of 2018 ranked Vancouver in 43rd spot, with a hefty annual price decline, amid a provincial tax on foreign buyers and new mortgage-qualification rules.
“Markets that have been the recipients of new macro-prudential measures in 2018, such as Hong Kong and Singapore, will slip down the rankings as buyers and developers adjust to the new taxes,” Knight Frank said.
“Vancouver, which also falls into this bracket, is the exception to the rule,” it added.
Indeed, what was the weakest luxury market this year “is expected to see prime prices stabilize in 2019 as local buyers start to identify buying opportunities.”
Looking back longer term, Vancouver luxury prices have climbed 52.7 per cent in the past five years as of the third quarter, and 101.5 per cent over a decade.
Those prices, though, have declined by 14 per cent since their peak in the third quarter of 2016, noted Kate Everett-Allen, Knight Frank partner, residential research.
“We expect price growth to stabilize in 2019 as buyers who have adopted a wait-and-see approach start to identify value in some districts,” Ms. Everett-Allen said.
“Confidence may also strengthen as buyers consider further policy interventions unlikely.”
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