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Luxury autos appear to be all the rage in Ontario and British Columbia, to go along with those luxury-priced, if often everyday, houses for sale.
A new analysis of the auto market by Bank of Nova Scotia economist Carlos Gomes shows sales of luxury cars and trucks in Canada have climbed 16 per cent so far this year from a year earlier, largely because of those two provinces.
“The Canadian luxury auto market has been heating up in recent months and has accounted for nearly 60 per cent of the year-to-date increase in overall volumes in Canada this year, five times its normal share,” said Mr. Gomes.
“The strength of the luxury market is concentrated in British Columbia and Ontario, the fastest-growing provincial economies.”
Indeed, sales by volume in January surged 25 per cent in B.C. and 15 per cent in Ontario, though Mr. Gomes expects the pace to slow.
He chose an interesting week for his analysis, if only by coincidence, because we’ll also get fresh statistics on home sales and prices, and how much we’re borrowing to help buy all these things, over the next couple of days.
The first, the latest reading of the Teranet-National Bank home price index, comes later in the morning. Expect it to show Toronto still driving ahead, though Vancouver is anyone’s guess.
Home sales in the latter have slumped in the wake of a provincial tax on foreign buyers of Vancouver area homes, though prices are still way out there.
The Greater Toronto Area, in turn, has experienced sharp gains in both sales and prices to the point where Ontario is now considering a Vancouver-style tax as one option.
The average price of a detached home in Toronto’s core 416 area code now tops $1.5-million, and even semis are going for over $1-million. The surrounding regions are no slouches, either.
We’ll get further evidence on Wednesday when the Canadian Real Estate Association releases its monthly sales report.
We already know from regional reports that Toronto was up and Vancouver down last month.
“In bubble territory, Toronto stayed red-hot in frigid February, with sales climbing a little more than 5 per cent, while prices continue to rocket more than 20 per cent year over year,” said Bank of Montreal senior economist Benjamin Reitzes.
“It looks as though the new mortgage rules, which took effect in the second half of October, didn’t make a dent,” he added.
“Meantime, Vancouver has gone the other way, with sales collapsing about 40 per cent year over year, and price gains slowing sharply.”
And just so you don’t forget what all of this means to your finances, Statistics Canada will tell us what we owe, also on Wednesday.
You can bet that the quarterly report will show a fresh high for the key measure of household debt-to-income.
Actually, best not to bet. You’ll only owe more if, by chance, you lose.