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Luxury real estate ‘will continue to grow,’ says Sam Mizrahi

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Canada’s real estate market may finally be facing the general recession that industry observers have been anticipating for several years.

Rising interest rates have caused home prices and sales to decline. In a recent interview, Benjamin Reitzes, managing director of macro strategy at BMO, said he would be surprised if house prices didn’t drop by double digits in the near future.

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While some experts are forecasting a possible market downturn, luxury real estate is showing signs of continued resilience. In Toronto, for example, homes valued at $1.5 million or more have continued to sell. April 2022 saw an increase of about 30 percent in sales of such houses from the previous year, the Financial Post reported.

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This suggests that for luxury home buyers, Canada’s real estate hot spots remain attractive enough to ignore rate increases and buy a house or condo anyway, said Sam Mizrahi, founder of Mizrahi Developments. .

“What we are seeing is that places like Toronto and Vancouver have reached a level of desirability that is not easily altered by changing market conditions,” said Sam Mizrahi, the developer of The One, a super-tall skyscraper that will become one. of Toronto’s most expensive condominium buildings when it opens in 2023. “The real estate market is likely to continue to fluctuate, but the desire to live here isn’t going anywhere.”

Andy Taylor, senior vice president of sales for Sotheby’s International Realty Canada, backs up that view, telling The Globe and Mail that all of Canada’s major real estate markets have largely avoided the negative impacts of interest rates and additional taxes on investors. foreign buyers.

“There is still interest in the best properties in town,” Taylor said. “That is the main and underlying message. Houses that need work, that need a facelift, are less desirable than properties that show triple A, which are 10 or more. And houses that are rare – we have a very short supply of larger condos in luxury buildings, and those are still seeing buyers.”

Ultimately, both Taylor and Mizrahi said that luxury home buyers make their decisions based on the lifestyle they want, not the purchase price.

“People who buy condos and luxury homes want the best, and are willing and able to pay for it,” said Sam Mizrahi. “Toronto, Vancouver and Montreal have become some of the most beautiful, diverse and cultured cities in the world. That kind of status doesn’t change overnight with subtle shifts in the market.”

A recent Sotheby’s report, Top-Tier Real Estate: Spring 2022 State of Luxury, concluded that the high-end housing market has continued to grow in major Canadian markets, including GTA, Vancouver and Montreal.

But the trend isn’t just true for Canada’s largest markets. A report in the Edmonton Journal found that the trend is also consistent with its own smaller housing market.

According to the Edmonton Association of Realtors, the city saw 65 properties priced over $1 million sold in the first three months of 2022, a 38 percent increase from the previous year. That would make it the city with the second-largest year-over-year increase, behind only Calgary.

The truth, Mizrahi said, is that Canada now offers the things so many people want from a modern lifestyle: well-designed cities with booming economies and rich culture, easy access to beautiful outdoors, and a stable government that maintains the cleanliness and safety of its public spaces.

Add to that list a luxury home that rivals anything in New York, London or Singapore, and you have the answer to why high-end home buyers keep coming to Canada, he said.

“I predict that this market segment will continue to grow for years to come, even if the rest of the market continues to fluctuate,” Mizrahi said. “People will continue to want to live here, and developers like myself will continue to build world-class homes and condos for them to live in.”

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