Sales of luxury condos of $1 million-plus are up across the country.
According to the latest RE/MAX Spotlight on Luxury Report, demand for million dollar properties is up in Toronto, Victoria, Calgary, and Vancouver.
The Greater Toronto Area (GTA) luxury condo sales saw a significant increase of 85% in sales between January and July of this year. According to the report, the price appreciation in the region resulted in more condos meeting the higher dollar threshold, and condo inventory levels failing to keep pace with demand. This resulted in baby boomers selling their homes, and used the equity to downsize to luxury condos.
Sales for detached homes between $1-2 million also increased during the first seven months of 2017, despite the new Fair Housing Plan in Ontario. The report states that the 15% non-resident speculation tax included in the plan slowed demand from overseas buyers in the GTA overall, but did not significantly curb activity in the region’s luxury market.
“During the first seven months of 2017, demand for luxury properties in the GTA remained strong,” said Christopher Alexander, Regional Director, RE/MAX INTEGRA Ontario-Atlantic Canada Region, in a release. “That being said, in recent months many buyers across the GTA have moved to the sideline and are taking a wait-and-see approach to get a better sense of where the market is headed in the long-term following the introduction of the Fair Housing Plan.”
Demand for single-family detached homes over $3 million saw the largest increase in activity, with sales up 55% from last year. Specifically, Oakville (in the GTA) continues to see a spike in real estate growth, with sales for properties between $2.5 and $3 million increasing by a leap of 112%.
Meanwhile on the west coast, Vancouver’s condo market cooled for the first seven months of 2017, but it still saw an 11% hike in the region thanks to affluent younger couples and downsizing baby boomers. Although, overall, the area experienced an increase in condo sales, there was a 32% decline in detached homes in its year-over-year average, which the report attributes to the foreign buyer tax implemented by the provincial government in August 2016.
“The foreign buyer tax introduced last year—combined with a good selection of luxury single-family detached homes—reduced buyers’ sense of urgency in this segment of Vancouver’s market,” said Elton Ash, Regional Executive Vice President, RE/MAX of Western Canada. “Conversely, supply was unable to keep pace with demand in the city’s luxury condo market and sales continue to rise year-over-year. As a result we are seeing more developers turn their attention to condo projects and are anticipating more luxury units to enter the market in the coming years.”
Calgary’s condo market also saw an increase for properties worth over $1 million. The Albertan city’s luxury market was up 21% in 2017.
“Consumer confidence grew over the first seven months of the year with the gradual recovery of the province’s oil sector, and there remains a good mix of inventory in the city, including in the upper-end of the market,” states the report, which listed the most expensive condo unit sold there this year at $6 million.
Luxury market trends in Canada’s major markets during the first seven months of the year are expected to continue through the end of 2017, according to RE/MAX.