Luxury condo, single-family home sales up almost 40 per cent compared to 2013

Demand for luxury real estate in Vancouver is booming and should increase through the year, according to a new report by Sotheby’s International Realty Canada. Eager buyers snapped up almost 40 per cent more million-dollar-plus condominiums and detached single-family homes in the first half of 2014 than they did during the same period in 2013, according to the luxury real estate report, a biannual study on market trends for pricey pads in Canada’s largest markets — Vancouver, Toronto, Calgary and Montreal.

Ross McCredie, the president and CEO of the high-end Canadian realty company, attributed the hot market to optimism.

“There’s so much confidence in the market right now, and that comes from the industry people as well as buyers and sellers,” he said in an interview.

“Compared to even a year ago, I think people feel pretty confident about Vancouver and B.C.’s future right now.”

The biggest jump in sales — at an increase of 51 per cent — came in the $4-million-plus category of single-family homes, according to the report, which compared data for residential properties that sold for more than $1 million between Jan. 1 and June 30.

For a sense of what that kind of cash buys in Vancouver, consider a Sotheby’s-listed, $6.5-million, two-bedroom, five-bathroom Kerrisdale home. The 6,415-square-foot French country-style residence has as many dishwashers as it has bedrooms, a wine cellar and a reflecting pool, and is heated with geothermal energy.

The only market segment in Vancouver that showed signs of weakness so far this year was attached home sales, which dropped two per cent compared to 2013.

But even that segment showed positive signs — 19 per cent of attached homes in the $1-2 million range sold for more than the list price in the first half of the year, compared to 10 per cent in the year prior. The homes sold quickly too, after an average of just 37 days on the market.

“You’re again seeing multiple offers and property selling above asking,” said McCredie. He said it looked like bidding wars were starting to take place, but cautioned that it could be a result of selling strategy.

“People are pricing things either at the price point or maybe even a little low just to get a bidding war,” he said. “Sometimes it works well, sometimes it kind of backfires.”

Dan Scarrow, the vice president of corporate strategy for Macdonald Realty, explained that sellers and their agents sometimes use that strategy when they think their buyer is likely to be from abroad.

“They like to feel like they got a deal so you want to leave some room to negotiate down from your list price,” he said.

In contrast, he said, local buyers will often ignore inflated listings, assuming the seller is either unmotivated or unrealistic.

In all, 104 attached homes over $1 million sold in the first half of 2014.

Sotheby’s had no Vancouver townhouses listed in the $1-2 million range on Monday, but there was a home in nearby West Vancouver that fit the bill for the sake of comparison. The $1.9-million, 3,148-sq-ft, three-bedroom, three-bathroom attached home features ocean views and a $120,000 “cavelike hot tub” with a cascading waterfall.

Luxury condominiums priced from $1-2 million saw a massive spike in year-over-year sales, beating the number of sales in 2013 by 47 per cent. A total of 243 condos had sold for more than $1 million in the first six months of 2014.

Condos priced over $1 million tended to sell faster than last year, but relatively few of them sold for more than the asking price.

That means a buyer spending a little more than $1 million should be able to call home the cheapest luxury apartment in Vancouver listed on Sotheby’s Monday. The $1.1-million, 1,263-sq-ft, two bedroom, three bathroom Yaletown penthouse has two-storey windows that offer city and water views and a balcony with some blue lighting that would look at home on Granville Strip.

In a city where million-dollar single-family houses are commonplace, it should come as little surprise that segment had the greatest volume of luxury sales so far this year.

“It’s not necessarily the foreign buyers. It’s not something new,” explained McCredie. “It’s just the people in the real estate market right now are kind of feeling, ‘you know what, there’s not a lot of real estate here, single family homes are going to be particularly in demand as we move forward, the economy looks good, there’s very low unemployment.’”

Scarrow said high levels of confidence as well as a low interest rate environment were certainly helping push home sales.

“But the reality is,” he added, “the really high end stuff is still generally being driven by money that’s been brought here from offshore.”

More than 1,300 luxury single-family homes sold in the last six months, up nearly 40 per cent from the first half of 2013. Single-family homes priced from $1-2 million sold in an average of 30 days, faster than any other luxury category, and nearly one-in-three sold over the listing price.

Sotheby’s analysts expect the high-end real estate market to gain momentum in the latter half of the year, citing a strong economy, increased consumer confidence and mortgage lending rates at historical lows.

The axing of Canada’s Immigrant Investor Program does not appear to have hurt the luxury home market to date, according to the report.

The most expensive Vancouver home listed by Sotheby’s on Monday was a $13.9-million, 4,875-sq-foot, six-bedroom, five-bathroom pad near the University of B.C.

The city’s priciest Sotheby’s-listed condominium was in Coal Harbour. The $6.3-million, 4,117-sq-ft, three-bedroom, three-bathroom penthouse has panoramic views, “his & her retreats” and five parking stalls.