7 questions to help you decide on luxury real estate

Luxury properties make us all dream a bit. Whether you’re a buyer or just curious, here’s a brief overview of the luxury real estate market.

According to data from several brokerage firms, and despite the state of the economy in recent years, luxury real estate is thriving around the world. This is true for Canada as well. A slight increase in the number of millionaires may account for this phenomenon, but greater social stability and low costs when compared to the international market are also attracting foreign investors to Canada.

The market value of luxury property is difficult to define precisely. It all depends on location and timing. However, it generally includes houses or condos worth over a million dollars.

A waterfront location adds to the value of a home, as does the proximity of amenities, such as a golf course, or the inclusion of services, like an indoor pool and a sizeable balcony in a condominium building. Of course, the size of the house and surrounding lot has a big influence on the price, as does the cachet of the neighbourhood.

Luxury real estate attracts a variety of buyers. Some foreign investors are buying Canadian properties, but the market’s clientele also counts a high proportion of young professionals and retirees who are selling their family homes to live in luxury urban condos.

Canadian real estate market forecasts suggest that, paradoxically, luxury properties will continue to benefit from the weakness of the Canadian dollar. It has also been forecast that about a trillion dollars will be inherited by the baby boomer generation in the next 20 years, which will facilitate home ownership.

Originality and exclusivity are the emerging trends in luxury real estate. In the condo market, the focus is on buildings with fewer units but more space. Custom design is central, wherein the most fashionable designers are hired to express their creativity. These units are sold in "limited editions" and this exclusivity ups their price considerably.

If you’re one of those lucky people on the verge of buying their first luxury home, take note of the following points:

• A luxury real estate property often includes more complex systems for security and heating. You’ll likely need a team of specialized, highly qualified home inspectors to check things out before you let the sale move forward.
• Because the home inspection will be more detailed, you should allow extra time prior to the confirmation of the transaction.
• Be sure to select an experienced broker for the sale or purchase of this type of property, as they’ll have more responsibilities to carry. They’ll have to negotiate with more professionals—such as lawyers and notaries—and advertise the property on an international scale rather than just locally. Look for a broker who is familiar with the area and well-acquainted with all pertinent laws and regulations.