Brandon Donnelly — Daily insights for city builders. Published since 2013 by Toronto-based real estate developer Brandon Donnelly. — Page 516

The global luxury goods market is somewhere around US$300 billion if you exclude fancy cars. And in just 4 years, global luxury spending has flipped from over 60% of it being in Europe and the Americas, to now over 60% of it being in Asia -- with over 40% of it being in mainland China alone. See above chart from the Financial Times .

But I think what really happened is that when global travel shutdown in 2020, Chinese buyers just started spending all of their luxury goods money at home instead of flying to Paris for the week. Because if you look at Chinese luxury goods spending in 2018 , somewhere around 1/4 of it was done in mainland China, whereas today it's close to 100%.

So the Chinese have been moving this market for quite sometime. But now that the consumption has moved entirely home, what does that mean for cities around the world? Hong Kong used to be one of the most important places for luxury consumption in Asia (no sales tax), but that has changed and it probably won't return. This is for reasons that go far beyond luxury goods.

But I think we'll see spending in Europe bounce back along with Asian travel. Because buying a luxury good is about much more than just the good itself. It's about the experience. It's about how it makes you feel when you buy it. And it's about signalling to others who you are as an individual. This may sound vacuous, but we all do it, with or without expensive luxury goods.

There are also new opportunities emerging by way of NFTs . I am sure that some brands are already doing this, but if I were in charge, I would issue a unique NFT with each luxury goods purchase that records, among other things, where it was purchased. Is a bag purchased on the Champs-Élysées worth more if there is a record of it that is etched in stone permanently? Maybe.

The Canada Mortgage and Housing Corporation (CMHC) just published its latest housing supply report for Canada’s 6 largest city regions ( downloadable over here ).

One figure that stands out is the increase in housing starts in the Calgary CMA — it was up almost 63% last year compared to 2020. This is a positive indicator for that market.

It’s also worth mentioning that Calgary’s supply is more evenly split between low-rise and apartment housing. This is in contrast to markets like Toronto, where 3/4 of all new housing is now “apartment”, and in Montreal, where the percentage is even higher.

My view is that it’s time to get more granular with our reporting of higher density housing. In the above example, we are showing 3 categories for grade-related housing and only 1 for anything outside of that.

This is our national bias toward low-rise housing coming through.

I somehow managed to get food poisoning in Amsterdam. I feel awful and I’m not in the headspace to write anything remotely thoughtful today. So regularly scheduled programming will resume tomorrow — hopefully.

P.S. It looks like Toronto will be getting its first Michelin restaurants guide . Good timing given this recent post .