While most house prices in Canada have recently taken a hit thanks to rising interest rates and fluctuating demand, the most expensive properties in the country are not experiencing the same roller coaster.
According to a report by real estate company Engel & Völkers, the ultra-luxury housing market has been largely unaffected by these factors over the last year and has, instead, seen major price increases across the board.
This is because ultra-luxury properties, which Engel & Völkers define as homes that costs over $4 million, have not been negatively affected by the rising interest rates.
Anthony Hitt, CEO of the real estate company, pointed out that while the interest rate has been on the upswing over the last few months in Canada, it's still at a pretty historic low over the last few decades.
"Many buyers in this segment are able to purchase the properties with cash and were taking advantage of historically low-interest rates in order to use their assets for other investments," said Hitt.
He added that those buying property outright, with no or a minimal mortgage, are not going to be impacted the same way as someone who has to buy their home with a full mortgage.
For Canadians not living the ultra-wealthy lifestyle, rising interest rates have made buying a home more difficult.
When interest rates raise, mortgages become more expensive to take out, plus anyone who has previously taken out variable rate mortgage will see their monthly payments go up.
But, even as these things largely affect the conventional home market, Hitt says that "current mortgage rates are still well within reach for ultra-luxury buyers should they choose to use one to purchase property versus a cash transaction."
This means, essentially, the squeeze most Canadians are feeling on their wallets right now does not apply to the wealthiest among us. So, it's not stopping them from going out and splurging on fancy properties.
And, unlike the regular market, the cost of ultra-pricey homes have also increased since January 2022. This is especially true in major hubs like Vancouver, Toronto, and Montreal.
"Condos priced over $4 million in the Montréal region saw the average sold price spike as the first half of the year came to an end. Home prices in this segment grew from $4,080,456 in February to $8,500,000 in May —an increase of 108%," Hitt says.
So, while the cost of a normal house in Canada has peaked and is expected to "correct" over the next few months, it seems that the richest of the rich are not seeing the same ebbs and flows in the market.
And it's high time they got a break! ...Right?
This article's cover image was used for illustrative purposes only.
The Cost Of Ultra-Luxury Homes In Canada Are Not Going Down & An Expert Explained Why
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