Luxury homes are in high demand in Edmonton, and the rest of the country according to a survey released by Remax today. Sales of luxury homes increased in 2013 (compared to 2012) as follows: Vancouver 36%, Calgary 34%, Edmonton 32%, Hamilton-Burlington 31%, Kitchener-Waterloo 27%, Toronto 18%.Here is what it looks like on a chart:
Here is what it looks like when you include the boom:
So it looks like 2013 was in fact a record setting year for luxury sales in the Edmonton area. And keep in mind, these numbers only include homes sold through the MLS, and I've certainly seen a lot of new construction that falls in the luxury category around Edmonton. The question is, why the sudden jump in luxury sales?
Luxury sales are not just increasing in number, but also in market share. In 2012 2.5% of homes sold were in the luxury category, while 3% of total homes sold in 2013 where luxury homes.
First there are the obvious reasons such as a rapidly expanding population, impressive job creation and low interest rates. The Remax report sites consumer confidence bolstered by job security as the catalyst for the increase in luxury sales. Interest rates may have had an impact on two levels - first off low levels make higher prices more affordable, and fear of higher rates can motivate buyers to jump.
Don Campbell raised a couple of other excellent reasons on his blog:
Many higher-income/net worth families have already purchased their ‘second/vacation property’ located in the US or Canada during the downturn, so their next move is to upgrade their home lifestyle. This is helping to prop up the higher end market in these key cities.
Investment alternatives (savings and bonds for example) are providing higher net worth individuals with lower return, so many are turning to putting that money into their home choices.
There's lots of luxury homes on the market right now, about a 6 month supply - check out Luxury homes for sale in Edmonton.
Barring any major financial meltdowns or regulatory/lending rule changes, I don't see any reasons this trend won't continue in 2014 in Edmonton, what do you think?