Until now, luxury real estate buyers have found inspiration in properties with a sense of grandeur. Whether via a stately brownstone in a major city, a quiet retreat in cottage country, or a tropical paradise somewhere abroad, they’ve opted for spaciousness, for homes that mirror their success.
While equally invested in purchasing an uplifting pied-à-terre, the next generation of luxury real estate buyers is redefining the priorities of home ownership.
Now in their twenties and thirties, millennials make up the largest living demographic in North America. With the help of the impending wealth transfer from their baby boomer parents, millennials make up half of the 32% of Canadians who are likely to purchase a home in the next two years. The share of home sales to first-time buyers has hit a 17-year high.
But even the most affluent millennial home buyers entering the luxury real estate market aren’t looking for a 10,000-square-foot gated manor with a four-car garage and 16 bedrooms. That’s because, for today’s purchasers, experiences are more important than objects—and that penchant shines through in everything from the properties they prefer to their expectations about their relationship with their REALTOR®️.
An Experience, Not a Product
Emerging luxury real estate buyers think of a property as a journey rather than as a destination. In its 2017 study of the emerging luxury market, Sotheby’s International Realty found that while spending on personal goods has slowed among emerging buyers, spending on experiences—travel, evenings out, spa breaks—is on the rise. The perfect home is less about the things in it, and more about how it will fit into the buyer’s daily life, so listings that show how the property supports a lifestyle are more successful than those that simply reel off amenities.
A home with a large backyard isn’t just more land—it’s a place for picnics and birthday parties, for playing catch or daydreaming in the sun. And an updated bathroom isn’t just a feature to tick off, but a spa-like oasis for a relaxing bath after a long day at work.
Video footage, augmented reality, and top-quality photography all help establish a sense of possibility before a buyer even sets foot on the property.
And as in the past, location is critical—with a twist. Where past generations have moved away from urban centres in favour of room to recreate, millennials are making a return to city life. In most cases, a smaller home located in an interesting up-and-coming neighbourhood is more appealing to today’s buyers than a larger place in the suburbs. Walkability and charm are key.
Character Over Capacity
With the explosion of social media in recent years, storytelling has become a critical life skill. As a result, a property with a story to tell can be at least as appealing to buyers as a brand-new build. Did this loft building used to be a brewery in the 1920s? Was this house built by the founder of a local charity? A home becomes a part of the buyer’s personal narrative, so heritage status, interesting histories, and thoughtful architectural details are all selling points. So, of course, are pure aesthetics: an updated kitchen, original hardwood floors, and plenty of natural light all show well on Instagram.
A Personal Connection
Consumers today value authenticity, curation, and a personal touch. When they shop, they don’t just want a brand that makes good products—they want a brand that aligns with their vision and values, that understands who they are and what they want, and that evolves over time to stay fresh and relevant. Home buyers want the same thing out of a relationship with their real estate agent. A REALTOR®️ who takes the time to build a personal connection and develop a deep understanding of a client’s needs and tastes has a chance of staying with that client from their first apartment to their retirement vacation home.
A Home to Grow In
The cost of housing in Canada has increased much more rapidly than the average salary. The result is that even adults working lucrative white-collar jobs may not be able to afford the same kind of home they grew up in, especially in markets like Vancouver. Instead, millennials are looking for a home that can adapt and meet their needs over time. Basement or attic suites, extra bedrooms, and laneway houses all provide a way to make a home more affordable in the present while holding space to expand into as buyers’ income and affluence rises.
The next generation of luxury real estate buyers isn’t looking for a property—they’re looking for the next chapter in their life story. Where their predecessors were wooed by new windows and roofs, plenty of bedrooms, and multi-car garages, today’s luxury buyers are more interested in updated chef’s kitchens, exposed brick detailing, and backyard orchards. They crave personal connections, historical interest, and curated selections. To reach millennial buyers, real estate organizations need to support their priorities.
Are you considering purchasing an investment property? The right piece of real estate is a great way to grow your financial portfolio while also potentially earning rental income. However, the recent introduction of a mandatory stress test to the mortgage qualification process means that certain buyers may need to reconsider their options.
What Is the Stress Test?
As of January 1, 2018, Canada’s Office of the Superintendent of Financial Institutions (OSFI) instituted a stress test for all mortgages. In the past, stress tests have only been required for insured mortgages—those with a down payment of less than 20%. Now, a test will be required of all home buyers in Canada—including existing homeowners renewing their mortgages, should they choose to switch lenders.
In basic terms, the stress test means that buyers must qualify for a mortgage at a higher interest rate. That rate is the higher of:
- The Bank of Canada posted mortgage rate (5.14% at the time of writing)
- The rate offered by your mortgage broker plus an additional 2%
As a buyer, you don’t actually have to pay the higher rate now, and you may not in future, either—you just have to qualify for the mortgage as laid out above. The idea behind the stress test is that if rates do rise, homeowners will still be able to afford their mortgage payments, and won’t be at risk of defaulting on their loan or losing their property.
The introduction of the stress test has changed the market, and should also change the way you think about your investment property.
You Will Qualify for a Smaller Mortgage
The stress test reduces the mortgage amount buyers will qualify for by approximately 18.5%. Meaning that if the investment property you’ve been considering is at the edge of your budget, you may face new challenges in making it a viable option. If you do still want to pursue a property in an aspirational price range, you’ll need to have a larger down payment in order to reduce the amount of the mortgage.
On the positive side, if worries about possible rate increases kept you on the fence about buying in the past, you can now buy with greater peace of mind. The stress test ensures that even if rates do go up, you’ll still be well-equipped to manage your mortgage payments.
The Pool of Buyers Is Smaller
It’s estimated that under the new terms, one in five potential buyers, or 20% of applying Canadians, will no longer qualify for their ideal mortgage. As a result, the competition for available homes is less intense than it has been in years past. If there’s an investment property you’ve had your eye on, now might be a good time to put in an offer. With fewer qualified buyers on the market, you have a much better chance of landing the property of your dreams without getting mired in a bidding war.
Rental Income Is Now a Key Part of Your Investment Strategy
As the criteria around home ownership shift, discerning buyers will want to consider rental opportunities when sourcing their next investment purchase. Rental income is an excellent way to ensure continued cash flow while you wait for your property to appreciate—and as more Canadians opt to rent, revenue from tenants becomes a reliable return on investment. If your property is in Vancouver, having a renter also means you won’t have to pay the Empty Homes Tax, a surcharge of 1% of the property’s assessed value based on the previous tax year.
OSFI’s introduction of a stress test for mortgage applicants protects homeowners from purchasing property outside their means. However, if qualifying for a mortgage is not a concern for you, this may be a good opportunity to purchase an investment property while rates are still low and high-end homes are available.
Have questions about how Canada’s stress test will affect your mortgage eligibility? Get in touch with Steven Hill at Sotheby’s International Realty Canada, or set up a meeting with a mortgage broker at your local bank or credit union.
Open House Cranston Calgary | Beautiful Home Listed By Steven Hill | Sotheby's International Realty Canada
The grind is over! I'm quite proud to announce that I just crushed the Real Estate Brokers Course and am now an Associate Broker with Sotheby's International Realty Canada!
Many, many, many loooooooong days of studying have paid off!! The quiet grind in our basement office is over!
Huge thanks to my amazing wife Shelley, my amazing Broker MaryAnn Mears for your mentoring and support and Sotheby's International Realty Canada for such an incredible brand to be a part of!
The Best Is Yet To Come!
Live Extraordinary in the highly sought after neighbourhood on Kinniburgh Pond in Chestermere. Where birds and nature are viewed from every window, sunshine and a relaxed lifestyle are at knocking on your doorstep. This gorgeous five bedroom executive home is a dream home! Contact Steven Hill of Sotheby's International Realty Canada in Calgary today for a showing! Until then, enjoy this peek inside!
Very excited to present 35 Cranford Crescent to market today. This 1348 Square Foot two storey home in Cranston is complete with a double detached garage, 3 spacious bedrooms and 2.5 bathrooms. Availble in the southeast community of Cranston in Calgary. Come have a look today!
From an early-1900s artist seeking an oasis for inspiration to today’s global citizen in search of a pied-à-terre, hotel residences remain top of the list for a chic luxury lifestyle.
In 1954, Ernest Hemingway took up residence in Venice’s famed Gritti Palace, the hotel where, several years earlier, he had written parts of his novel Across the River and into the Trees. This time, Hemingway was recovering from a plane crash that occurred while he was on safari in Africa. According to legend, the writer’s convalescence involved copious champagne and indoor baseball, played with a tightly rolled woollen sock in his much-coveted corner suite. When a window was smashed in the room, Gritti Palace management gave Hemingway a 10-percent discount on his bill, on the basis that no one had ever before played baseball in the 300-year-old hotel.
Hemingway’s Gritti residency is just one story in the long, sometimes glamorous history of living large at landmark hotels. A hotel residence can offer an oasis for creativity in the midst of a bustling urban hub, like when Claude Monet painted the Thames from his suite’s window as the artist-in-residence at The Savoy in London. Irish actor Richard Harris also kept a suite at The Savoy for many years until his death, at age 72. “If you’re paying the mortgage on a home, you can’t ask the bank manager to fetch you a pint,” Harris purportedly once declared.
A hotel residence can also provide a refuge, as it did for the reclusive Howard Hughes, who hid out at The Beverly Hills Hotel’s Bungalow 4 after he was in a near-fatal plane crash in 1946. Or it can provide a high-profile perch for holding court, as was the case for Coco Chanel, who moved into the Ritz Paris in 1937, in a suite designed to her specific tastes for the better part of three decades.
Having an address at an ideal location and eliminating many of the quotidian cares of conventional home ownership are both central to the allure of establishing oneself in a fine hotel. Though hotel living goes back centuries, starting in the early 20th century, a new generation of “palace hotels” helped turned the practice into an art. “At palace hotels, the truly wealthy enjoyed perfected personal service, superior dining, sociability as well as privacy, physical luxury and instant status — all at a cost lower than keeping a mansion or large house,” writes Paul Groth in Living Downtown: The History of Residential Hotels in the United States, published in 1999. Hotel life, he says, “eliminated the routine responsibilities of managing a large house and garden, devising details for the constant round of dinner parties and elaborate family meals, and supervising an often unruly staff of servants.”
The allure continues — a new generation of purpose-built hotel-style residences has been blurring the line between conventional home ownership and hotel living. At Four Seasons Private Residences Montreal, scheduled to open in late 2018, 18 private residences will occupy the top four floors of the 18-storey, 163-room five-star hotel development, offering residential owners the best aspects of hospitality and home ownership.
“Residents could stay in a hotel but choose a condominium because they can furnish it [the way] they [want to], and it is more permanent,” says J. Allen Smith, president and chief executive officer of Four Seasons, a Canadian-based company with some 60 years of experience in hospitality — 30 in residential property management — and with properties all over the world. “For many people, it’s the amenities that are compelling — the opportunity to access the same services associated with the hotel.”
That said, residential owners often want access on their own terms, separate and more private than what’s available to hotel guests. Those who buy into the Four Seasons Private Residences Montreal will have their own entrance, managers, and concierge and valet services and can enjoy hotel amenities like the fitness centre and spa, the ballroom and an open-concept dining and entertainment space, replete with a 2,000-square-foot terrace.
The building itself sets out to be a Montreal landmark, developed by Carbonleo and designed jointly by Montreal firms Lemay and Sid Lee Architecture. The grey-tinted glass exterior evokes timeless elegance that complements the buildings around it — with views Monet would appreciate. The residences themselves, designed by Montreal’s Philip Hazan, are spacious and open-concept, proffering dramatic floor-to-ceiling windows and either a private terrace or a classic-style loggia. The hotel and amenity spaces have been created by design firm Gilles & Boissier in Paris.
But perhaps it’s the location within Montreal’s famed Golden Square Mile that will earn the property a place in the pantheon of illustrious residential hotels. Right next door to a newly renovated Holt Renfrew Ogilvy, the Four Seasons Montreal is walking distance from the Museum of Fine Arts and the Bell Centre, and Sainte-Catherine and Crescent streets, all in the heart of what remains to be one of North America’s most chic cities.
Smith notes that residential owners often come from diverse backgrounds and lifestyles. For example, at the Four Seasons Private Residences in London’s Mayfair, Twenty Grosvenor Square — scheduled to open in mid-2018 — many of the owners would consider themselves global citizens, with pieds-à-terre in several countries. At the Four Seasons Hotel New York Downtown, also known as 30 Park Place, which opened in 2016, owners are more likely to use their home as a permanent residence. Most of them are attracted to the Four Seasons brand and its track record of delivering top-quality luxury experiences.
“Often, these are people who associate themselves as our very best customers. They have already developed a relationship as hotel guests,” says Smith. “Our Montreal property is being built to the same level of sophistication and finish [at] any of our properties. I travel all over the world, and the standards for excellence are remarkable.”
No wonder that Eloise, the exuberant title character in the series of books by Kay Thompson, about a girl who lives with her nanny on the “tippy-top floor” of New York City’s Plaza Hotel, was so adept at finding adventure. A top hotel provides the breathing room to explore and discover new things — and to be yourself. Of course, the adventures that residential owners might pursue from their enviable address are entirely in their own hands.
By Paul Gallant – *This article originally appeared in INSIGHT: The Art of Living | Spring 2018
Photos: Granger Historical Picture Archive/Alamy; World History Archive/Alamy; Georgios/Istock; LPettet/Istock
I recieved a call from a seller who has had his listing expire with an unsuccessful sale. Within one hour, my team and I had a teaser video of his home created, full listing presentation and CMA, and I met with him shortly after.
He was looking for someone who could market effectively, but more importantly, someone who had drive. CHECK!
Excited to release this amazing video featuring The DeWinton Retreat
Set in a beautiful acreage, this home has all the features for the enthusiast or hobbyist with 2 separate workshops and an attached 3 car garage, there is space for everyone's passions!
It's always nice when nice people say nice things about you!
Cheers to great clients!
Knowledge is Power
Had the pleasure of speaking to invited guests of Investors Group at Prohibition Freehouse last night. Great people, amazing food and wine and gracious hosts. Thank you @kenchenyyc @prohobar @investorsgroup for the honour of kicking off the evening with a little real estate insight for 2018
Excited to Share the Following Testimonial From The Managing Broker at Sotheby's International Realty Canada | Calgary
When it was time to sell my home, my stress level was through the roof! As a broker in real estate you'd think I'd have this down cold but that was not the case when selling my family home after a divorce. When I sold real estate my biggest focus was on my clients being well-informed; both the good and, yes, sometimes the not-so-good. The key with providing information is the ability to create a plan, or roadmap, and to be ready to adapt the moment the data starts to show a new story.
Steven was that agent for me. Steven knew the emotional journey this was going to be. He understood that my children, almost grown, had a sense of attachment to their home where they grew up. Steven also understood my financial need to sell. Selling was a need, not a want. Steven was able to read the market and help me to understand the realistic pricing. Together we went to the home and made a list of all the needed repairs and upgrades that a prospective buyer would expect at my price point.
When my home was ready to list, Steven and his team were able to present my home in a very favourable light. To be honest, I cried when I saw the photos. This was our home where my eldest, when very young, would dance and sing around the whole house, where my son learned to drive his dirt bikes and my youngest cooked her first Sunday nosh-up.
Steven's care and guidance continued into the showings, the late night calls of why there was no offer, and through the tough conversation of about whether or not to lower the price. During all those times, Steven was professional, honest and, most of all, focused on the main goal - selling my home so the children and I could have a better, more financially secure life.
Steven's tremendous gift to us was his calmness and reassurance during negotiations, which prevented me from leaving money on the table and allowed me to keep it in my pocket. I'd become so desperate to sell that I was willing to slash the price and give away the home at a bargain basement price, but Steven took the reins and assured me that his recommendations were for the best. In the end, Steven was able to secure a large sum of cash that, in my haste, I would have walked away from.
I'd highly recommend Steven to any and all my friends, colleagues and to anyone who would ask me for a recommendation. Steven has become a trusted friend.
Sotheby's International Realty Canada
Somerset Calgary Home Sells With BackUp Offer for 99% of List Price By Steven Hill of Sotheby's Realty
Steven Hill Sells Calgary Somerset Home For 99% Of List Price!
Strength In Marketing, Presentation and Negotiations is evident with this successful Calgary home sale in Somerset, Southwest Calgary. This home conditionally sold in 3 days on the market, and later obtained a backup offer as well which ended being the successful bid. Steven Hill shows how the strength of the Sotheby's Realty Brand along with his presentation skills can provide a seller with a positive outcome in today's Calgary Real Estate market. Both offers were for 99% of List Price! Contact Steven at email@example.com for more details.