CANADA HOUSING MARKET RESILIENT IN FACE OF MORTGAGE RESTRICTIONS

Luxury property prices in Canada are standing strong against the introduction of tighter mortgage lending measures.

According to the most recent report from brokerage Royal LePage, the value of high-end homes in some of Canada's must illustrious cities are have remained resilient this year, despite dropping sales volume as sellers and buyers adjust to the new housing market measures.

The stricter lending rules were implemented at the beginning of the year in an attempt to make sure borrowers can afford mortgages at a time of rising interest rates.

“Home prices in Canada’s luxury real estate market have remained remarkably resilient when you consider the economic headwinds that serial government interventions have created,” says Phil Soper, president and CEO of Royal LePage. “The resilience of home values reflects the strong aspirations of luxury buyers to reside and work in cities that are consistently ranked among the most desirable on the planet.”

During the first four months of 2018, the median price for a luxury condo in the Greater Vancouver and the Greater Toronto areas rose 7% and 10.4% respectively, compared to the same time last year. Price growth for luxury condos outpaced that of luxury detached homes, which logged rises of 5.2% and a fall of 0.2% respectively, according to the report.

During the same time frame, the median price of a luxury condo in the Greater Montreal Area and in Ottawa rose by 3.9% and 4%, respectively, while in Calgary condo prices fell 6.1%.

Houses in these regions performed better. The Greater Montreal Area logged the largest price gain in the detached luxury home segment, increasing 9.1% to $1.56 million. In Ottawa, luxury homes rose in value by 6.3% and in Calgary 0.6%.