High end home sales in Toronto set to dominate this year, Sotheby’s says

High end home sales in Toronto set to dominate this year, Sotheby’s says (Photo by Robert Jack 啸风 Will/Flickr)

Toronto is poised to lead the country in high-end home sales for the third consecutive year in 2017, according to Sotheby’s International Realty Canada.

The realtor released a report Wednesday that looked at sales of homes for more than $1 million in Toronto and three other cities—Calgary, Montreal and Vancouver.

It concluded that 19,692 such properties were sold last year in the Greater Toronto Area—an increase of 77 per cent compared to 2015. Sales of luxury homes —those worth more than million—in the GTA rose 95 per cent year-over-year to 290 homes.

There is a confluence of factors responsible for the red-hot growth in Toronto’s top-tier real estate market, said Brad Henderson, president and CEO of Sotheby’s International Realty Canada.

Among them are low interest rates, strong employment and consumer confidence, and a limited supply of properties for sale, particularly in the single-family home segment.

“With natural boundaries like the lake and the Greenbelt, the Greater Toronto region has less developable land than other markets,” Henderson said. “As a consequence, there are less opportunities to add to the supply.”

In Vancouver, high-end home sales started off strong but slowed in the second half of the year as a number of government policy changes took effect. They included a one-per-cent tax on vacant homes implemented by the City of Vancouver and the B.C. government’s 15 per cent tax on foreigners buying homes in Metro Vancouver.

Those changes amplified a cooling in the Vancouver real estate market that started over the summer, Sotheby’s said.

Sales in Vancouver’s million-plus market were down 34 per cent year-over-year in the second half of the year compared to the same period in 2015.

But on an annual basis, sales of Vancouver homes worth $1 million or more were relatively flat last year, down one per cent year-over-year to 4,515 properties.

Luxury home sales were up 36 per cent year-over-year in the city, with 573 properties priced at over $4 million trading hands.

Sotheby’s predicts that the Vancouver market for $1-million-plus homes will remain stable in the first quarter of this year.

Calgary’s $1-million-plus market also saw a boost last year. After declining 40 per cent year-over-year in 2015 due to the sudden plunge in oil prices, sales of homes worth $1 million or more were up 19 per cent to 612 properties in 2016.

Sotheby’s Canada says it’s expecting a buyers’ market in Calgary in the first quarter of the year as the city’s economic challenges drag on.

In Montreal, high-end home sales increased 23 per cent year-over-year to 613 properties, thanks to a stable provincial economy and political landscape, Sotheby’s said.

The realtor says global turmoil—including Britain’s vote to exit the European Union and Donald Trump’s election win in the U.S.—injected uncertainty into global real estate markets last year.

Canada, which is regarded as a safe haven, has a low dollar and a strong real estate market, making it a desirable destination for real estate investment and immigration, the report said.