World’s Hottest Luxury-Property Market Is a Sleepy Canadian City

(Bloomberg) -- The hottest market in the world for luxury real estate? Victoria, British Columbia.

Thanks to Chinese and U.S. buyers, the provincial capital of 85,000 off Canada’s Pacific Coast shot to the top of the “luxury thermometer” in the latest annual report from Christie’s International Real Estate. The study looked at the change in sales, price and time on the market from 2016 to 2017, converting to U.S. dollars and including factors such as “buying trends, destination preferences and lifestyle amenities” in its definition of luxury.

Victoria was only fifth-hottest based on average price -- up 6 percent to $1.2 million from 2016, with a high of $9 million -- behind Paris; Washington; Orange County, California; and San Diego. But the little city of afternoon teas and lush gardens soared when it came to sales volume and speed, which Christie’s weighted more heavily. The number of sales grew by 29 percent from 2016, while the average time to find a buyer was only 32 days, among the fastest turnover anywhere.

British Columbia, seeking to cool a run-up in property prices that has stirred local outrage, has been taxing foreign purchases of property in Vancouver by as much as 20 percent since 2016 and recently extended the levy’s reach to include Victoria, at the tip of Vancouver Island. Ontario followed with a 15 percent tax last year in Toronto.

That’s unlikely to kill the appetite for million-dollar mansions in Victoria. Sales in Vancouver and Toronto have slowed, but prices haven’t fallen, and Christie’s expects the provincial capital to hold up too.

Plus, it’s a bargain. The typical luxury sale in New York City was $3.6 million. And where was the most expensive residential sale in the world last year? This one you just might guess.

Hong Kong. For $360 million.

©2018 Bloomberg L.P.