Sales of homes priced at more than $1.1 million soared 18% in Vancouver this year while sales of homes priced between $300,000 and $500,000 eked out a mere 0.5% increase, according to study by CIBC World Markets.
And is it is not only Vancouver that is seeing a yawning gap between lower-priced homes and higher-priced ones.
Sales of homes priced at $1 million or more soared 34% in both Vancouver and Toronto and were up 17% in Calgary and 11% in Montreal in the first half of this year.
Metro Vancouver sales worth more than $1 million increased to 1,664 units for condominiums, attached and detached single-family homes combined, 34% more than the units sold in the first six months of 2013. Most of the $1 million plus sales were detached houses, with 1,317 units – but there has been a “significant increase” in sales of townhomes and condos priced at over $1 million as well, according to Ross McCredie, president and CEO of Sotheby’s International Realty Canada in its annual Top Tier Real Estate Report.
CIBC cautions that the runaway housing prices will force more first-time buyers out of the market and freeze many mid-value home owners in place.
“Regardless of what your starting point is, the desired move-up target is getting further and further out of reach,” said CIBC analyst Benjamin Tal.
But the higher-end housing market appears to have strong legs.
“We expect Canada's high-end housing market to see consistent growth through to early 2015,” said McCredie. He cites three key reasons for the optimism: immigration of high net-worth individuals into cities like Toronto and Vancouver, significant transfer of wealth between generations and historically low interest rates.
