Good old-fashioned hard work, not birthright, is the key to unlocking fortune and the front door of a new luxury home, says the 2007 Carriage Trade Luxury Properties Report by Royal LePage.
In a poll (conducted by Ipsos Reid) of high net worth Canadians, almost half (46 per cent) cite hard work as the main driver to attaining wealth, followed by the drive to succeed (27 per cent) and a higher education (18 per cent). Only four per cent of respondents chalk their success and their financial stability to being born into the right family, while a mere one per cent attribute it to plain old luck.
The report includes a market analysis of trends and activity in eight major cities across Canada, combined with a national poll that measures attitudes, upbringing and beliefs of high net worth Canadians, as defined as individuals with assets of at least $250,000 (excluding real estate) and a primary residence valued at a minimum of $500,000.
Regional variances were observed across the country with the largest increase in unit sales occurring in the nation’s capital, Ottawa, followed by energy-rich Alberta. Increases of more than 200 per cent in Ottawa are due to a large pool of international buyers and local executives and professionals. The number of high-end home sales rose by 71 per cent in Edmonton and 38 per cent in Calgary, fuelled largely by in-migration of executives in the oil and gas sector, as well as homeowners trading up.
“Luxury living is no longer the exclusive domain of a few. Buoyant economic conditions and confidence in the market going forward have ignited a growing passion for investing in luxury property among an increasing number of Canadian families. Consequently, homes in this market niche have been trading briskly, and this has put upward pressure on prices,” says Phil Soper, president and CEO, Royal LePage.
“The poll findings reveal that real estate in the Carriage Trade market is both sought after and attainable for hard working people across the country.”
When it comes to the value of primary residences, 12 per cent of high net worth Canadians live in homes with price tags starting at $1 million, while almost half (47 per cent) of respondents live in properties valued from $600,000 to $999,000.
“Prosperous Canadians see real estate as an important element in their investment portfolios,” says Soper. “Demand for well-appointed properties remains strong with a trend of affluent Canadians owning more than one home. In fact, one-quarter of wealthy homeowners own two properties, and six per cent own three residences while two per cent own more than five properties.”
Success seems to transcend sectors with luxury property owners citing a spectrum of occupations including entrepreneurs (13 per cent), CEOs and senior executives (10 per cent), medicine (10 per cent), sales (seven per cent) and law (three per cent). The poll found that 32 per cent of high net worth homeowners have already retired and can now enjoy the fruits of their labour.
In Montreal’s luxury home market, sales of properties priced above $900,000 rose 14 per cent in the first quarter, year-over-year. Luxury home buyers are typically between the ages of 35 and 60 and are highly successful professionals or executives.
In Ottawa, about a third of all buyers in the luxury market are from overseas. Many of these buyers are senior executives transplanted to Ottawa, while others have discovered the city through their travels and are drawn to the city’s features and attractions.
The number of unit sales priced from $1 million and up increased by 22 per cent in Toronto during first quarter 2007 over first quarter 2006. Purchasers in the luxury market are typically professional couples in their 40s, 50s and 60s, and are most often trading up from their current luxury home. The buyer pool in this market also includes people who have been transferred in from the U.S. and Europe.
Backed by a strong economy, the luxury housing market in Winnipeg remained robust during the first three months of the year. High-end homeowners are typically executives, private business owners, lawyers or doctors.
In Edmonton, sales of homes priced from $950,000 and up increased significantly during the first quarter of 2007. Purchasers in the luxury real estate market are typically 35 to 45 years old with young families, and have achieved their wealth through their professional careers, as well as inheritances.
Fuelled by a robust economy and unwavering in-migration, Calgary’s luxury housing market remained strong during first quarter 2007. Sales of homes priced from $1 million and up increased by 38 per cent in the city compared to the same period last year.
Vancouver remains a strong destination both nationally and internationally among luxury buyers. In Vancouver, the luxury home market is firmly in the sellers’ favour as frenetic activity and multiple offer situations continue to characterize the market. Sales of homes priced over $1 million in Vancouver rose by 24 per cent in the first quarter of 2007.
