Sales of Luxury Homes Surge

Times Colonist, September 21, 2004
By Carla Wilson

The Point, which was willed to UVic, has been the most expensive sale of the year at $4.65 million.

High sales volume has pushed Greater Victoria to second place in percentage appreciation in luxury-home sales numbers across the country, says a new RE/MAX report.

"There's a huge confidence in the Canadian economy right now," said Elton Ash, vice president and regional director of RE/MAX of Western Canada.

Low interest rates, an increased value in home equity and profits in the corporate sector in the past couple of years have led to sales in the high-end market, Ash said from Kelowna Monday. Executives who want to enjoy the success in their lives have been buying up.

Baby boomers, professionals, entrepreneurs, executives, celebrities and professional athletes are largely behind the boom, the report said.

Ash predicts the demand for luxury homes will stay strong in the next year to 18 months. If the provincial Liberal government is re-elected next year, he says that will deliver more stability to B.C., which would help keep the real estate market strong.

"Given slow stock-market recovery and poor returns on guaranteed investment certificates, Canadians are clearly turning to upper-end real estate as an investment in lifestyle and the future."
A huge pent-up demand exists in all residential sectors, Ash said.

The report found that not only have the number of sales increased but prices have risen. Find a desirable neighbourhood and the value can appreciate far beyond the area average.

"It defies all logic. Housing markets across the country have faced numerous obstacles in recent years - ranging from economic uncertainty, terrorism, and war, to major health threats - yet they continue to exceed all our expectations," said Michael Polzer, executive vice-president of RE/MAX Ontario-Atlantic Canada.

RE/MAX's report is based on percentage increases in sales in different areas, based on what constitutes a luxury house in that region, Ash said.

Numbers vary from area to area. For example, an upper-end house in Regina can be bought for $250,000, considerably below the $700,000 mark in Greater Victoria.

The report compared multiple listing services sales from January to August of last year with the same months this year.

White Rock/Surrey is tops in the country in terms of percentage appreciation with a 151 per cent increase in sales of homes worth more than $800,000. the report said. Victoria places second with a 108 per cent increase in sales of homes over $700,000. There have been 206 such sales this year, compared with 99 for the same months in 2003.

After Victoria, West Vancouver posted a 96.5 per cent increase in sales of homes worth more than $1 million. Regina followed, then Winnipeg, Ottawa, Edmonton, Vancouver's west side, Montreal and Toronto.

There are more than 270 listings in the high-end category in Greater Victoria, with 155 priced at more than $1 million, the report said.

The most expensive sale this year is The Point, built by hotelier Michael Williams, who died in 2000 and willed his spectacular Ten Mile Point waterfront home on 2.6 acres to UVic. The house was sold last December for $4.65 million and the sale closed in February, said Wayne Schrader, RE/MAX Camosun owner.

The most pricey home on the local market is listed at $6.5 million with its own island off Thetis Island. The second most expensive home is closer to us, situated on 5.3 acres in Ardmore in North Saanich. That property, with a 7,000 square-foot house, is listed for $5.8 million.

Popular upper-end neighbourhoods continue to be Oak Bay, Uplands, North Saanich and other parts of the Saanich Peninsula. "Waterfront properties and water view properties are most sought after, and the ultimate symbol of success," said the Re/MAX report.

Bidding wars are less common now. The average time on the market was just over a month last year and has increased to 112 days this year, said Schrader, who worked on the report. That time frame "is still pretty good for a multi-million dollar house," he said.

Talk to real-estate agents locally and you'll hear that Victoria has been discovered internationally and that our prices can look pretty good.

A Victoria Real Estate Board survey covering 11,904 sales between January 2003 and June 30 of this year found about 25 per cent of buyers are from out of town.

Of those, more than 46 per cent were from other parts of B.C. Of buyers within the province, 21.5 per cent were from up-Island, 19 per cent from the Lower Mainland, and the rest were from other parts of B.C.

Buyers from other provinces represented slightly more than 30 per cent of out-of-town buyers. Albertans represented 15 per cent, with Ontario buyers at 16 per cent and Quebec at 10 percent, the survey said. Other provinces had lower numbers of buyers.

U.S. buyers accounted for nine-per cent of out-of-town buyers and Asian buyers for one per cent. The number of European buyers represented less than two per cent of out-of-town buyers, the survey found.