Luxury home sales down in ‘18
Sales of luxury properties fell in three of Canada’s biggest cities last year as homebuyers retreated amid tightened mortgage guidelines and higher interest rates, according to a report by Sotheby’s International Realty Canada.
The report released Wednesday found that Vancouver, Toronto and Calgary saw large drops in high-end real estate sales in 2018 as the markets dealt with a number of headwinds including tighter supply, higher foreign buyers taxes and strained economic conditions due to the falling price of crude.
“There were a series of policy initiatives that were put in place... (and) what we’re seeing now is that the combination of these things has taken hold and has delivered a soft landing that (governments) were hoping to see,” said Brad Henderson, president and CEO of Sotheby’s International Realty Canada.
The real estate brokerage said there continues to be rising consumer anxiety in the Vancouver housing market about the “unintended outcomes” of the government intervention.
Last year, the B.C. government increased the foreign buyer tax to 20 per cent and expanded its geographical area, raised school taxes for homes valued over $3 million and launched new taxes on speculation and empty homes.
The Sotheby’s report — which looked at the high-end housing market in Toronto, Vancouver, Calgary and Montreal — found that the number of homes that were sold for $1 million and higher was down 26 per cent in Vancouver, while home sales priced $4 million and more fell 49 per cent year-over-year.
In Calgary, sales of homes for $1 million and more fell 10 per cent in 2018 as crude oil prices plunged in the last quarter of the year. Only one home sold for more than $4 million in that city in 2018.
In the Greater Toronto area, sales of luxury homes worth $1 million and more declined 31 per cent, while sales of homes over $4 million and more fell 40 per cent last year. In the city of Toronto, sales of homes over $1 million fell 19 per cent, while sales of over $4 million and more dropped 39 per cent.