Canada’s Luxury Home Market is HOT!

Even though Canada’s economy cooled in the first half of 2015, the country’s luxury housing market seriously heated up. In the GTA alone, there were 279 homes sold over $3,000,000 in the first seven months of this year, up 61 per cent from the same period last year.

Why the increase? Analysts attribute the spike in luxury sales to two things: A worsening shortage of single-family homes and an influx of foreign investors.

The issue of foreign investors has become a hot topic for some who worry that money from abroad may be pricing locals out of the housing market.  Conservative Leader Steven Harper recently brought the issue of foreign homeowners into the federal election campaign, pledging to spend $500,000 next year on the collection of data on foreign investors’ role in the Canadian housing market.

This year, a new element has been added to the foreign-investor story: a declining Canadian dollar, which is making Canadian real estate more affordable for foreigners.

“These buyers, primarily from China, are typically families with children who are relocating to Canada to live. They’ve chosen Canada for its stable economy and high quality of life, and their real estate decisions are strongly influenced by proximity to good schools”, says Toronto developer Peter Freed.

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