How Is Our Local Luxury Home Market Different?

The Canadian luxury home market is reported to be surging ahead significantly in many markets across the country.  According to a recent article in the HuffingtonPost, sales above $1.5 million in Toronto were up 18% in 2013 while sales over $2 million in Vancouver increased 38%.  Given the high cost of just a moderate home in these two cities, $1.5 and $2 million may not be good benchmarks to track luxury home sales activity.  I have seen some pretty ramshackle homes in places like the Beaches of Toronto going for $800,000.

 As previously mentioned herein, 2013 was a good year for luxury home sales in the southern Georgian Bayarea especially above $1.5 million.  I think this indicates to some degree, similarity with Toronto (GTA) for example where $750,000 to $1 million doesn’t necessarily buy you anything really special so you’ve got to get up over $1 million or higher in order to truly buy something luxurious with the features and quality of workmanship that belies what Buyers in this niche are looking for. The big differences I have noted between the local luxury home market and that of say of the GTA lies in a couple of distinct areas.

  First appears to be the amount of available inventory.  ReMax has released a report which says 1,908 properties over $1.5 million sold in the GTA last year with 1,000 luxury properties currently listed.  If these numbers are correct then the GTA has little more than 6 months worth of available inventory.  As of this posting we have 105 listings on the Southern Georgian Bay Association of REALTORS® MLS® system which represents 48 months of available inventory in a market segment that is somewhat fickle. The total value of the current local housing inventory over $1 million is $181.9 million so again that is 5 years of inventory. 

  

  Secondly, the 26 sales in our area last year represented $36.3 million or roughly 5.8% of total sales volume yet in terms of units, 26 sales in less than 2% of total single family homes sold.  By comparison, the ReMax report indicated that luxury home sales in Oakville last year were 5% of units sold double that of our local market.  In terms of dollars, Oakville’s luxury home sales amounted to 16% of total dollars sold or three times what we experienced here.

  What does all this mean?   Luxury home sellers in southern Georgian Bay need to understand that this is a much smaller market segment that places like Toronto, Oakville and other urban centres.  As such, they can expect a much longer days-on-market here locally than luxury property sellers in the aforementioned cities.  Secondly, the luxury home market here has at any given time, a much higher level of available inventory for sale.  This again will result in much longer days on market but also makes the whole issue of pricing your property much more important.  

  If you are looking to buy or have a luxury property in this market area to sell, I would be delighted to discuss and share my knowledge with you in confidence.