Luxury-home sales plunge in pricey Canada markets
TORONTO: Canada set out to cool a hot housing market, and did it ever.
Luxury-property sales in the nation’s priciest markets fell sharply in the first half of the year amid a slew of government regulations, according to a report released by Sotheby’s International Realty Canada.
Sales of homes above C$1mil (US$760,000) fell 46% in Toronto and 19% in Vancouver from a year earlier, while the number of homes sold above C$4mil dropped 51% in Toronto and 47% in Vancouver.
The declines follow a wave of lending constraints and taxes implemented by both the federal and provincial governments to tame soaring prices fueled by speculative purchases.
“The collision of rising mortgage rates, stricter lending guidelines and cascading governmental policies and taxes” have hurt a number of important Canadian markets, Brad Henderson, president and CEO of the Sotheby’s unit, said in a statement.
In the condominium subcategory, Vancouver bucked the trend, as homebuyers who were priced out of detached houses turned toward the high-rise alternative.
Sales of condos above C$1mil rose 9% in the first six months of the year from the same period in 2017, and 35% for condos above C$4mil. In a city where the benchmark selling price for a detached house was C$1,598,200 in June, a C$1mil condo still looks pretty good, with growing demand from young families and professionals.
“There’s a belief that condos, in particular new condos, are going to continue to be a good investment notwithstanding some of the interim policy measures, and that the market will be able to absorb it and to move on,” Henderson said. — Bloomberg