LAVAL, Que. - Re/Max says luxury home sales soared in the first quarter of 2010 as affluent purchasers moved to take advantage of favourable market conditions.

The real estate firm says nine out of the 13 Canadian markets it examined shattered records and set new all-time highs for first quarter activity in the upper end.

Kelowna, B.C. led the way in terms of percentage increase at 700 per cent, followed by Montreal at 300 per cent and Victoria at 275 per cent.

The increase in the Toronto area was 263 per cent and it was 184 per cent in the Vancouver region, 169 per cent in Hamilton-Burlington and 164 per cent in Edmonton.

Re/Max says an improved economy, increased personal wealth because of the stock market recovery, immigration and foreign investment all contributed to the upswing in sales and prices.

The brokerage also noted that the 2009 first quarter was one of the worst on record, making the year-over-year comparisons dramatic. That low-price point came during the stock market collapse caused by the Wall Street financial crisis and the plunge into recession in mid-2008. That wiped out hundreds of billions of dollars of investors' wealth on the TSX, Canada's dominant stock market.

However, the bounceback in many areas - including Greater Vancouver, Victoria, Winnipeg, London-St. Thomas, Greater Toronto, Ottawa, Montreal (Island), Halifax-Dartmouth, and St. John's - surpassed past record prices, Re-Max said in its report.

"Luxury sales as a percentage of the market have been steadily increasing in recent years - with the exception of 2009," said Sylvain Dansereau, executive vice-president of Re/Max Quebec.

"With the return to economic growth, it's expected that the number of high net worth individuals will begin to rebound, following two years of consecutive decline. This will continue to help prop up Canada's luxury market going forward."

Greater Vancouver topped the entry-level price point for high-end homes at $2 million, followed by $1.5 million in Greater Toronto and Montreal.

Greater Vancouver also holds the title for the most expensive home sold through MLS in the first quarter - an 11,600 sq. ft. home changed hands for $10.06 million.

'Recovery in the upper end has been nothing short of remarkable," added Elton Ash, the regional vice-president for Re/Max in western Canada.

'There is no doubt that mindset has changed and confidence has returned. One only has to look at the percentage increases to see the current upward trajectory."

As prices for luxury homes rise fast, it's likely that wealthier Canadians are also getting deeper into debt to finance their home purchases. And with mortgage rates rising - two big banks bumped up borrowing costs Monday for the third time in a little over a month - the cost of servicing those loans is also going up.

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