The spring luxury real estate market in Toronto should be a brisk one.
According to a new report from Sotheby’s International Realty Canada, the city staved off headwinds brought about by last year’s mortgage rules, as well as a series of interest rate hikes, and, on the heels of a strong second half to the year, sales are expected to exceed 2018 levels.
“High demand is also projected for the $1 million-plus attached home segment in spring 2019, as sales volume experienced significant gains early in the year,” read the report. “Sales over $1m soared 40% year-over-year in the GTA to 182 units sold, and increased 55% in the City of Toronto to 157 units sold.”
Condominiums priced $1m-plus are also expected to see a boost in sales, continued the report.
“In the first two months of 2019, condo sales over $1m rose 7% year-over-year to 145 units sold in the GTA, and increased 3% to 134% units sold in the City of Toronto. Population gains, as well as affordability challenges that limit consumer access to single family and attached properties, continue to drive condo demand, particularly within the urban core and for larger units.”
According to Sotheby’s International Realty Canada’s President and CEO Brad Henderson, Toronto remains Canada’s blue chip real estate market and it should surprise no one that the city deftly managed last year’s turbulence.
“We’ve seen people withdrawing to the sidelines, particularly sellers, with the reason being a high degree of confidence that somebody can sell their property,” Henderson told REP. “Anything well priced and well located is still attracting more than one offer and selling above listing price.”
That said, the feverish market of 2016 through early 2017 is in the rear-view mirror.
Vancouver, on the other hand, won’t be so lucky this spring. Through the first two months of 2019, sales for all housing types in the $1m-plus dropped 52%, with only 270 changing ownership. During the same period in 2018, 576 homes were sold.
The single-family home market also saw a 35% decline in sales through January and February of this year, with 223 sales.
“All markets face headwinds from the stress test and high interest rates, so it’s not surprising that activity levels have decreased,” said Henderson, adding that levies on foreign buyers and speculators also stifled market activity.
“Inventories are putting downward pressure on prices. We’re still seeing a market that’s adjusting. It’s very much a buyer’s market and we don’t see that changing for the next 12 months or so.”