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For upscale home purchasers money is no obstacle
Sep 14, 2007

A home now open to the public as part of the Manitoba Home Builders’ Association’s Fall Parade of Homes reflects a growing trend toward luxury home sales in Winnipeg.

The two-storey, four-bedroom, five-bath show home at 24 Eastoak Dr. in Royalwood is listed for sale at $1.19 million.

A few years ago, any home listed over $300,000 would have been a rare occurrence, but so far this year 91 homes sold for $400,000-plus. In fact, there are another 80 homes currently listed  on MLS® in this category, according to the recently-released RE/MAX Upper-end Market Trends Report.

A 9,000-square foot five-bedroom home on Wellington Crescent in River Heights is currently listed on MLS® for $3.3 million. 

To date, a Tuxedo home has sold for $1.3 million, while a condo on Wellington Crescent sold for $1.25 million.

By comparison, between January and July in 2006, only 91 homes in the $400,000-plus category were sold. Although last year, one Winnipeg home did sell for just over $2 million.

In 2004, sales in the top end of the market “represented a minute 0.64 per cent of all residential sales. Today, luxury home sales represent three per cent of the market,” according to the report.

The 3,650-square-foot display home in Royalwood, built by Maric Homes, emphasizes the luxury home trend by also featuring 20-plus original paintings,  sculptures and other objets d’art from the Mayberry Fine Art gallery. Among the renowned artists displaying artwork in the home are Wanda Koop, Peter McConville, Robert Genn and Abraham Ruben.

“Art takes a home to the next level — whether it’s a show home or your home,” said Shaun Mayberry, co-owner of the gallery.

In Winnipeg, the next level has been achieved by a robust economy and soaring consumer confidence, which has led to an 85 per cent increase in the sale of luxury properties in Winnipeg, according to the report.

“Trade-up purchasers have been extremely active in the marketplace, as they take advantage of wealth accumulated in recent years through equity gains and economic prosperity,” said the 

report. “An influx of purchasers from 

Alberta, many of whom are former 

Winnipeg residents, has also bolstered upscale sales.”

The RE/MAX report said upper-end homes in the $400,000 to $600,000 price range tend to sell quickly. “A small percentage of these listings will also experience multiple offers.”

What is true for home sales is also true for condos with a number of high-end developments coming on-stream.

“The Waterfront project in the Exchange District, for example, offers units starting at between $500,000 and $600,000. Popular with empty-nesters and retirees, the condominium lifestyle is now an accepted and desirable form of homeownership,” according to the report.

“Tuxedo, River Heights, East St. Paul and Linden Woods remain popular 

with affluent purchasers and streets 

like Wellington Crescent, South Drive, Shorecrest and Park Boulevard have become synonymous with wealth in the city.”

The report said that upscale property sales are expected to climb over the next 12 to 18 months because of solid economic fundamentals and affordable house prices, when compared to other major Canadian centres.

Luxury home sales from January to July in Canada’s major centres were up over the same period one year ago in all markets, with percentage increases ranging from 13 per cent in Victoria to 521 per cent in Edmonton.

Four markets, including Edmonton, Regina, Saskatoon and Ottawa, reported triple-digit increases, while double-digit gains characterized remaining markets. The report also found that the upper-end price points were under stress in most markets surveyed.

“Strong economic performance, especially in Western Canadian provinces, has bolstered consumer confidence levels to such a degree that purchasers in the upper-end are comfortable with $1 million-plus investment in real estate,” said Elton Ash, regional vice-president for RE/MAX of Western Canada.

“The consumer appetite for luxury property has been insatiable," said Michael Polzler, executive vice-president and Regional Director, RE/MAX Ontario-Atlantic Canada. 

“Unabated demand throughout the year has created tight market conditions in a number of blue chip neighbourhoods. 

“Limited availability of product has, in turn, placed mounting pressure on housing values. As a result, the $1-million home no longer holds the same caché it once did and in larger markets such as Vancouver, Calgary and Toronto, it’s simply a starting price,” he added.

In Vancouver, the upper-end starting point for luxury homes is $2 million with 249 sales this year up to July. The highest sale price from January to July was a $5-million Vancouver home. Currently, there is a home listed for $18.2 million in the city.

In Calgary during the same period, there were 311  luxury home sales at a starting point of $1 million. In Edmonton, 87 luxury homes sold at that city’s starting point of $900,000. 

The starting point in Toronto was $1.5 million and 505 homes sold in this category.

Benchmark sales, including one home priced at close to $16 million in Toronto, are occurring with greater frequency and overall, there are more sales taking place in the very upper reaches of the marketplace this year. 

In smaller centres, benchmarks have been set throughout the year and although some centres, such as Regina, have yet to report a $1 million sale, that day is approaching.

“It appears that a growing percentage of the population has that kind of money to spend,” said Polzler. “Growth in market capitalization has generated tremendous wealth in recent years — in fact, both the Dow Jones and S&P 500 reported double-digit growth in 2006. Demand for luxury goods overall — upscale homes, fine art, collectible cars — is outpacing demand for everyday consumables. 

“Inheritance has played a significant role as well, with the download on an estimated $1 trillion amount already underway," added Polzler.

“When it comes to shelter, these upscale purchasers clearly want it all,” said Ash. “Price is really no obstacle when it comes to creating a legacy.”

The Fall Parade of Homes runs until September 30.