Sales Of Luxury Homes In Quebec Stabilizing After Years Of High Growth

Unit sales remain at record high according to Carriage Trade Report

(Monday, October 17, 2005) - Sales of high-end homes in Montreal and Quebec City reached record highs in the first half of 2005, according to a Carriage Trade Quebec Luxury Properties Report released today by Royal LePage Real Estate Services. However, despite the record number of sales, the year-over-year growth rate of the Quebec market is beginning to stabilize after a period of exceptional growth in the last five years.

Across the country, the solid performance of the Canadian economy is reflected in the strength and resilience of the luxury housing market. While many of the major markets experienced year-over-year increases of over 40 per cent in the first half of 2005 (as reported in the national Carriage Trade Report on Sept. 15), sales growth in Quebec's luxury market occurred at a more modest rate.

Quebec Luxury Home Market Summary

Montreal


January to June
January to December

Year
$750,000+ units sold
Year-over-year % change
Units sold in all price categories
Year-over-year % change
$750,000+ units sold
Year-over-year % change
Units sold in all price categories
Year-over-year % change

2005
181
5.2%
28450
0.3%
N/A


2004
172
55.0%
28367
7.7%
325
30.5%
48564
2.9%

2003
111
32.1%
26344
-9.8%
249
50.9%
47182
-0.7%

2002
84
82.6%
29203
16.1%
165
98.8%
47505
12.0%

2001
46
53.3%
25164
14.5%
83
36.1%
42405
18.4%

2000
30
15.4%
21971
3.5%
61
19.6%
35823
5.4%



Quebec City


January to June
January to December

Year
$450,000+ units sold
Year-over-year % change
Units sold in all price categories
Year-over-year % change
$450,000+ units sold
Year-over-year % change
Units sold in all price categories
Year-over-year % change

2005
27
17.4%
4861
12.2%
N/A


2004
23
27.8%
4331
6.33%
39
14.7%
7584
4.0%

2003
18
125.0%
4073
-18.1%
34
126.7%
7296
-10.1%

2002
8
33.3%
4975
10.3%
15
25.0%
8118
5.4%

2001
6
500.0%
4510
2.0%
12
500.0%
7705
10.3%

2000
1
0.0%
4422
14.7%
2
100.0%
6985
10.8%


Source: local real estate boards (GMREB, CIDQ)

In Montreal, sales of homes priced at $750,000+ rose 5.2 per cent, year-over-year, in the first six months of 2005 to a historical high of 181 units. During the same period in 2004, there were 172 units sold in this price category. Sales of high-end homes have experienced unprecedented growth in the last five years, with 2002 and 2003 sustaining the highest year-over-year gains (98.8% and 50.9%, respectively). In 2004, unit sales of home priced in this category rose 30.5 per cent, year-over-year, which was significantly above the overall market growth of 2.9 per cent.

While the rate of growth in the luxury market is stabilizing, it is still outpacing the market in terms of overall unit sales, which grew 0.3 per cent, year-over-year. Listing inventory has increased in 2005, easing the pressure on prices and allowing buyers to take more time when selecting a home.

"The luxury housing market, buoyed by a robust provincial economy, low interest rates and healthy levels of demand, continued to experience above-average growth in Montreal in the first half of 2005," said Diane Menard, vice president/general manager, Royal LePage Heritage, Westmount. "However, we expect the stabilization of unit sales growth to continue as rising listing inventory creates balanced conditions in the higher end of the market."

The most sought-after areas for luxury buyers include Westmount, the Town of Mount Royal, Senneville, Beaconsfield and Baie d'Urfe. Stone facades, fully renovated kitchens with stainless steel appliances and sub-zero refrigerators, cathedral ceilings, and luxury finishings such as granite and marble are all popular features with buyers.

Many of the buyers who purchase high-end homes expect to spend a significant amount on renovations after the sale to ensure the home is exactly to their specifications. Local executives are the most active in the luxury market, although buyers and investors from Europe and the United States have also been active in 2005.

In Quebec City, sales of high-end homes have continued to experience healthy growth, with a record 27 units priced at $450,000+ sold in the first six months of 2005. This represents an increase of 17.4 per cent over the same period in 2004 (23 units sold). Since 2000, sales of homes priced in this category have experienced considerable growth, climbing from only two sales in 2000 to 39 units sold in 2004 – an increase of 1850 per cent. This is especially notable when compared with the overall market, which had a growth in unit sales of only 8.6 per cent in the same period.

The luxury housing market in Quebec City has experienced increased activity over the last few years, as sales of higher-end homes continue to rise at a greater pace than the rest of the market. However, listing periods for luxury homes in Quebec are still longer than those of homes priced closer to the average, and generally range between five to six months.

"Pent-up demand has helped the luxury market in Quebec City sustain vigorous growth in the last five years as buyers who had previously held off during the weaker economic conditions of the 1990s began to enter the market," said Paul-Henri Everell, broker/president, Royal LePage Inter-Quebec. "In the coming months, the province's overall healthy economy and improving supply will sustain housing affordability and lead to slower but stable growth in the luxury market."

Buyers purchasing luxury homes in Quebec are often looking for a property with a view of the St. Lawrence River, a large lot and a convenient location close to the city centre in neighbourhoods such as Sillery, St. Foy, Cap Rouge and St. Augustin. Popular features among luxury-minded buyers include four to six bedrooms, large areas for entertaining, patios, large garages and, depending on the location, a pool.

For further information, please contact:

Susana Hsu (susana@mcipr.com) or Kate Langan (kate@mcipr.com) at Mansfield Communications Inc., phone 416.599.0024

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