Luxury market provides insight into Toronto’s housing recovery

Year-over-year luxury home sales in Toronto are up through the first six months of 2019—a surefire sign that the city’s housing market is well into recovery.

According to Sotheby’s International Realty Canada’s 2019 Mid-Year Real Estate Report, sales for homes over $1 million surged 12% in Toronto, while sales in the $1-2m range and $2-4m range rose 13% and 9%, respectively.

“Within the City of Toronto, attached home sales over $1m increased 28% in the first half of the year to 880 units sold, with a monumental 67% selling above asking price,” said the report.

“Overall the market for single-family homes over $1m increased in the GTA, with sales up 11% to 6,895 homes sold in the first half of 2019, compared to 6,220 sold in the first half of 2018,” continued the report.

The 2019 Mid-Year Real Estate Report noted that Montreal, on the heels of a record-setting 2017-18, has emerged as Canada’s most vibrant market for top-tier real estate.

“Montreal, for the first time, has experienced something really unique,” said Sotheby’s President and CEO Don Kottick. “Its million-dollar-plus condos are outperforming Canada’s top-two markets in year-over-year percentage gains [homes over $4m surged 267% with 11 units sold through the first six months of 2019, compared to three in 2018]. A robust economy and a lot of political stability are driving consumer confidence and we have more cranes in Montreal than we’ve had in quite some time.”

Kottick added that Montreal is the fifth-fastest growing metropolitan region in North America.

Vancouver is a buyer’s market, thanks to a strong job market, and rising supply is putting downward pressure on prices. However, Kottick says that affordability remains the preponderant problem for Vancouverites.

“People with million-plus-dollar budgets are able to get into the single-family home market, whereas a few years ago that was way out of their budgets,” he said. “But with price compression, we’re seeing new opportunities for those individuals.”

Calgary’s $1m-plus market has been somewhat inconsistent, but the job market in Alberta is improving and new listings are beginning to decline. While the city’s housing market is still quite shaky, Kottick says a trickle-up effect is beginning to take hold.

“Based on business confidence, which is on the rise, it will have a trickle-up effect,” he said. “I do see it coming back, and hopefully it’s coming back strong.”

MBN

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