Comparing Luxury Home Prices: Is It More Affordable To Buy In The US Or Canada?

A luxury residence, often nestled within the top 5% of properties in any given metropolitan area, epitomizes upscale living, characterized by lavish amenities, prime location, and architectural significance. However, the cost of these exquisite properties varies significantly across countries, influenced by a multitude of factors, ranging from market dynamics to governmental policies. In this article, we delve into a comprehensive comparison of the luxury housing markets in the United States and Canada, exploring the affordability of opulent homes in these neighboring nations. We aim to shed light on the key parameters that shape the pricing landscape, offering insights to potential investors and home buyers keen on soaking in luxury living.
 
Luxury Home Prices: US Overview
In the United States, luxury homes embody the epitome of success and affluence, standing as a testament to the country’s economic prowess. These properties, often located in sought-after neighborhoods, are equipped with state-of-the-art amenities and boast grandeur in both design and architecture. The price of a luxury home in the US can vary greatly depending on the location, with coastal areas like California and New York commanding higher prices due to the high demand and limited supply. The luxury real estate market in the US is dynamic, continually evolving with economic trends and buyer preferences.
 
In the past year, the US luxury home market has seen significant growth, with high-end prices escalating three times faster than the overall market. This spike in luxury home prices, a 9% increase in just the third quarter, has led to the median price of a luxury residence standing at a whopping $1.1 million, in stark contrast to the median price of non-luxury properties at $340,000.
 
Despite these soaring prices, luxury homebuyers have shown resilience and adaptability, with many either paying cash to circumvent high mortgage rates or opting to take a high rate with the plan to refinance later. In fact, the number of luxury homes purchased outright in cash has risen to 42.5% in the third quarter.
 
Moreover, the number of active luxury listings has seen a modest increase, up 2.9% year-over-year. This growth in high-end properties for sale has been particularly noticeable in major cities like Fort Worth, TX, and Tampa, FL. These trends reveal a robust and dynamic US luxury home market over the past year.
 
Luxury Home Prices: Canada Overview
Similar to its southern neighbor, Canada also offers an array of magnificent luxury residences that exemplify high-end living with outstanding amenities, prime locations, and distinguished architectural merit. Ubiquitously spread across the country’s major cities like Toronto, Vancouver, and Montreal, these luxury homes reflect the country’s rich, diverse culture, and its economic stability.
 
The Canadian luxury home market has experienced some interesting fluctuations over the past year. A decline in supply in many major cities has put pressure on values at lower price points, subsequently stimulating increased demand in the luxury segment. Despite the first quarter of the year failing to reach the peak levels of 2022, luxury sales figures have consistently risen throughout the year, outperforming the previous year’s sales.
 
As for the median luxury sales point, it has been pegged at $1,301,250. However, there is a stark contrast in Vancouver, where luxury homes are frequently sold around the $4 million mark, revealing a considerable market disparity within the country.
 
Analyzing specific locations, Halifax saw 10% of its market consisting of $1 million single-family homes. In Ottawa, listings between $1 million and $3.99 million grew by 3%. Toronto also experienced a growth spurt, with the average sold price ranging from $1 million to $3.99 million, growing by 3.7%.
 
The Canadian luxury home market, though faced with supply constraints, has demonstrated resilience, with sales figures steadily increasing throughout the year. Despite regional discrepancies, the market growth and demand for luxury homes in Canada remain palpable.
 
Comparative Analysis
Both the US and Canadian luxury home markets show strong resilience amidst varying conditions. However, several distinct differences exist between the two. On average, a single-family luxury home in Canada tends to be significantly more expensive than those in the US. This disparity is somewhat balanced by select smaller markets in Saskatchewan and New Brunswick, where the average prices are more on par with US cities.
 
The low supply of luxury homes in Canada, in comparison to the US, has resulted in bidding wars among potential buyers, enabling sellers to list their properties at higher price points. This phenomenon is less prevalent in the US, where the number of active luxury listings has seen a modest increase.
 
The recent rise in interest rates in Canada has also contributed to the surge in housing prices. This is in contrast to the US where many luxury homebuyers are bypassing high mortgage rates by purchasing properties outright in cash or opting for high rates with plans to refinance later.
 
While both markets display robustness and growth, the luxury home market in the US appears to be more affordable when compared to Canada due to various factors such as increased supply and flexible financing options.