A potent combination of historically low mortgage rates, rising family incomes and soaring home-equity values is helping to fuel record sales of luxury homes in Winnipeg, says a new report from Re/Max Canada.
In its Upper End Report released on Tuesday, the real estate firm said 439 luxury homes changed hands last year in the city. That was a 26 per cent increase from the 349 sold in 2012, and a whopping 189 per cent increase from the 152 that changed hands in 2009.
"Affluent purchasers including executives, entrepreneurs, athletes and professionals are driving demand for single-family homes over the $500,000 price point, while empty nesters and retirees are setting new records for high-end condo sales," the report said.
Re/Max defines a luxury home in the Winnipeg market as any house or condominium that sells for more than half a million dollars.
The most expensive house to change hands last year was a newer, riverfront property in Charleswood that went for a cool $2.2 million. And the priciest condo was a nearly 3,000-square-foot, apartment-style unit on Waterfront Drive that sold for $1.3 million.
Re/Max said the Waterfront Drive condo was one of 33 luxury condos sold in 2013.
That was nearly triple the 2012 total of 13 units.
Alan Ediger, a real estate agent with Re/Max Executive Realty in Winnipeg, said the historically low interest rates are probably the bigger driver behind the surge in luxury-home sales in recent years.
"You can get way more house now for way less money."
There are also more dual-income families now than there used to be, including more families where both partners are university-educated and earning good money, Ediger said.
And many of the new immigrants the province has been luring to Winnipeg are professionals -- doctors, engineers, etc. -- who have the means to buy upper-end homes, he added.
"So it's not just people from Whyte Ridge moving to Waverley West. It's also people coming into the country."
Another big driver of demand are soaring home-equity values, said Winnipeg Realtors Association (WRA) president David Powell. Most Winnipeggers have seen a dramatic increase over the past decade in the value of their existing homes. That, coupled with low mortgage rates, has enabled them to trade up to a more upscale property.
Ediger agreed, citing the case of an 11-year-old, four-bedroom bungalow in southwest Winnipeg that sold in 2005 for $460,000 and sold again last year for $780,000.
Powell and Peter Squire, the WRA's residential market analyst, said more new homes and condos also are being sold now through the local Multiple Listing Service. And many of them are priced at more than $500,000, which boosts the yearly totals.
"It's tough to get into a 1,500-square-foot home now for under $500,000, when all is said and done," Powell added.
Not surprisingly, the upper-end homes in the greatest demand are those at the lower end of the luxury-homes price range -- those valued at between $500,000 and $600,000. Re/Max said they accounted for almost half of last year's high-end sales, although there were 25 properties that sold for more than $1 million. That was two more than in 2012.
Given the positive economic outlook for Manitoba, Re/Max said luxury homes should continue to sell well in 2014. Ediger said he wouldn't be surprised to see a new record set.
The burgeoning demand for higher-end homes is part of a national trend that saw more than two-thirds of the 16 Canadian cities included in the Re/Max report setting a new record for luxury-home sales in 2013. Vancouver had the biggest year-over-year gain, at 26 per cent, while Regina had the biggest five-year increase, at 288 per cent.
"Canada's luxury market is rising to an entirely unprecedented level," said Elton Ash, regional executive vice-president for Re/Max of Western Canada.
"As appetites for upper-end properties have increased, so, too, have expectations. The new 'it' factor is opulence. Having the best finishings is a given."
Ash said condos are no exception, "with some now equalling their single-family counterparts in lavish amenities and values."
With rising house prices, is a $500,000 home still a luxury home? What price would you say counts as a luxury home? Join the conversation in the comments below.