Canadian Real Estate Market Alert – The Great Comeback of Luxury Properties
Article by Canadian Home Find
Recreational and luxury properties were the hardest hit when real estate markets took a nosedive a few years back. The global financial crisis had led to the downfall of a lot of property development projects. In fact, most industry experts had described the high-end segment of the real estate market as one “enormous sinkhole.” Faced with increasing construction cost, tight financing and dwindling sales, a lot of development projects went down the drain even before they could enter the market.
There is now a renewed interest in recreational and luxury residences. In fact leading indicators seem to show that this segment is well on its way to full recovery. Nonetheless, most marquee developers are still reluctant to ride the tide to recovery and plunge into action. Since most development companies took a serious hit a few years back, they could not afford to overextend themselves unless the real potential of the real estate properties is carefully assessed.
Is it time to buy recreational or luxury residences? Real estate players are not aggressive this time around. Property developers and industry experts alike were caught off-guard when the full impact the financial crisis finally reached the high end segment of the real estate market. They were blindsided by the unexpected turn of events and the rate at which the market dried up at the height of the global financial crisis. When the problem was at its peak, sales of these properties went zilch.
Notwithstanding the gravity of the situation then, the real estate markets made a strong rebound, and things are looking good again for real estate markets. Developers are again operating in positive territory, and the figures that are coming in point to a strong comeback across all segments of the real estate market.
What led to the dramatic shift? Experts attribute this positive development to the prevailing mindset of sellers. The global financial crisis had left a deep scar in the mindset of major stakeholders and high-priced property investors. Most, if not all of them, went into selling mode with the primary objective of unloading from their current portfolio high risk assets. The prevailing mood among these property investors was that they have missed the peak of the market, and they are left with no other option but to sell even below the assessed value of their properties.
This market situation bodes well for potential buyers of this type of properties. In urban centers, real properties with selling price above $ 3 million will attract few buyers, and in most cases it will take longer time before such properties are sold. The prevailing mood among sellers is that of the urgency to move the properties as soon as possible to cut their losses.
For buyers, this is good news. If you are searching for a recreational property, then this is the right time to make a buy. In all real estate markets in Canada, serious buyers can find one-of-kind real estate properties with asking prices that are well below their assessed values – and in some instances, below their replacement cost. This is the prevailing condition in markets of recreational properties in areas such as Whistler, Muskoka, Okanagan and Mont Tremblant.
Despite the positive development in real estate markets and encouraging leading indicators, experts are quick to point out that a recreational property is far from being a “homerun” purchase. Although there are great deals in the high-end segment, basic rules in real estate still apply. This means that the three most important variables that must be considered by buyers are location, location and location. For the high-end segment of real estate market, location is the number one driver of property values.
It is also important that you look beyond the great view when assessing the investment potential of recreational properties. Wise buyers must also take into account the architectural significance of recreational properties. In most cases, size will not have much impact on the actual value of the property. However, you must seriously consider aesthetic appeal, quality of design and construction and overall function of the recreational property.
Article by canadianhomefind.com Canada’s most effective For Sale By Owner service. Click for more information on: For Sale By Owner how-to Most Effective FSBO Programs Browse FSBO Listings