LESS LUXURY

SALES OF HIGH- END HOMES IN THE TORONTO AREA HAVE SLUMPED BADLY SO FAR THIS YEAR.

TORONTO• Sales of luxury homes in the Toronto area were hit hardest by the slump in real estate during the past two months, with the number of high- end detached houses sold plummeting even as prices nudged up.

Sales of homes worth more than $ 3 million fell 58 per cent between Jan. 1 and Feb. 28 with just 76 properties changing hands, compared to 180 transactions during the same period a year ago, according to a report by Re/Max Integra.

The decline in sales was significantly more severe than in the overall singledetached house segment in which transactions declined 36 per cent.

Prices in the luxury segment lifted 2.5 per cent to $4,201,873, according to Re/ Max figures.

The Toronto Real Estate Board had predicted a sluggish start to 2018, particularly when compared to peak levels during the opening months of last year, when frenzied activity fuel led double- digit price increases and bidding wars were commonplace. The market cooled following the introduction in April of new measures by the Ontario government, including a foreign-buyers’ tax. New mortgage rules that make it tougher to qualify for a loan also took effect in January.

“You really have to just throw out 2017 as a benchmark,” said Christopher Alexander, executive vicepresident and regional director for Re/Max, who characterized it as an “outlier year.”

“We all knew that with the market the way it was last year and all the new rules, the numbers would be way down by comparison,” he said.

Sales of upper-end homes in January and February were more in line with the same period in 2016, when the market was less heated, he added.

The slump in luxury home transactions was largely due to a dearth of quality listings in the segment, Re/Max said. Much of what is currently on the market is dated and in need of significant investment, while newer properties that are in good condition are often selling within 30 days and realizing 98 to 100 per cent of their list prices.

“It’s hard to say why so few properties are coming on the market,” Alexander said, adding that luxury buyers tend to be insulated from fluctuations in interest rates. “Part of it is if they sell where are they going to go? There’s not much out there.”

While turnover of entrylevel properties priced between $500,000 and $750,000 has picked up over the past couple of months, inventory has been more static in the luxury end of the market, said Scott Ingram, a Century 21 realtor in Toronto. He suspects many high- end homeowners are choosing to hold on to their properties until the market settles.

“If you don’t need to sell and you have the luxury of waiting until the market picks back up, maybe that’s what you do,” he said.