Luxury home sales on upswing
Larger jump in mid-sized Canadian cities than urban centres, report finds
Luxury home sales have sprung to life in the first two months of the year as more than two-thirds of Canadian markets recorded double digit growth, including the GTA with a 14 per cent increase yearover-year.
However, it was mid-size cities that saw the largest jump in sales while large urban centres were hampered by sellers holding out for pandemic-era values and buyers seeking bargains, said a Tuesday Re/Max report on luxury home sales, defined as twice the average sold price of local properties.
Affordability is the key difference contributing to, in some cases, a 50 per cent boost in sales of luxury properties in mid-size markets, which is attracting buyers from overpriced provinces such as Ontario and B.C., said Re/Max Canada president Christopher Alexander.
“Mid-size cities are still about half the price or less of Toronto and Vancouver,” he said. “Many people have been cashing out of those two provinces to look for more affordable options.”
From Jan. 1 to Feb. 29, Saskatoon saw the highest sales increase at 57 per cent compared to the same time last year, but the luxury price point in that market is $700,000. It shows that moving to smaller cities means you can have luxury living at a significantly reduced cost, Alexander said.
“Affordability is eroding at such an alarming pace in Ontario and B.C., it’s become a disadvantage,” he said. “We really have to keep an eye out on these two provinces because they’re in danger of having this divide of the people who have, and those who don’t.”
The exodus from these provinces is affecting the luxury market in Alberta, where sales of homes in Edmonton priced at $1 million experienced a 32 per cent jump in sales while Calgary homes priced around $1.5 million saw a 52 per cent leap.
The GTA saw 167 sales of homes
The GTA saw 167 sales of homes worth $3 million in the first two months of the year, resulting in a 14.4 per cent jump year over year
worth $3 million in the first two months of the year, resulting in a 14.4 per cent jump year over year. But it was home sales over the $5million mark that led the way with a 77 per cent sales increase. It’s important to note that there were 32 sales of properties in that price range in the first two months of the year compared to 18 properties during the same time last year, said Alexander.
“You don’t get many sales in that segment of the market,” he said. “If there’s 10 or 20 more sales per year it makes the increase look astoundingly large.”
Activity remains hampered in homes priced between $3 million and $4 million in Toronto’s central core with some communities down to just a few homes for sale such as Leaside with three listings and the Beaches with four listings, the report said.
But there is more inventory coming to market as some downsizing is also occurring, with empty nesters and retirees making lateral moves into luxury condominium apartments, townhomes, and new builds on smaller-sized lots in desirable neighbourhoods, the report added. Downsizing allows those who want to move up the property ladder to have more inventory to choose from, freeing up movement overall in the market, Alexander said.
“When the luxury market is healthy it’s a sign that the rest of the real estate market is in good shape,” he said. “During a high interest rate environment, there’s been a lack of mobility. But with the promise of rate cuts, people are making more transactions indicating a robust spring market.”