Toronto led Canada in sales of homes over $1 million in the first half of 2016, and according to Sotheby’s International Realty Canada, it will continue to do so in the fall. But on the other side of the country in Vancouver, sales of homes in that price range are expected to moderate.
In a September 14th press release, the brokerage explains that Toronto and Vancouver both experienced large year-over-year increases in $1-million-plus home sales in the first six months of the year — 35 and 26 per cent, respectively. However, during the summer months sales of homes above $1 million were markedly different in the two cities.
Notably, sales of single-family homes over $1 million in Toronto rose 55 per cent year-over-year in July and August, while sales of condos over $1 million jumped 86 per cent. Meanwhile, in Vancouver, sales of $1-million-plus single-family homes fell 30 per cent in July and 65 per cent in August. And though Vancouver sales of condos above $1 million jumped 29 per cent in July, they dropped 49 per cent the next month.
Sotheby’s expects that divergence to continue, and believes Metro Vancouver’s recently introduced 15 per cent foreign buyers tax will be behind it. Although the firm notes that it’s too early to guess what the tax’s long-term impact on Vancouver’s luxury homes market will be, it does see it “moderat[ing] sales activity and velocity in the fall.” Sotheby’s also believes that it may redirect international investors’ interest to Toronto during that time, though “strong local market fundamentals and consumer confidence” will also drive luxury home sales in that city.
Those predictions echo other recent comments about the overall Toronto and Vancouver housing markets. TD economists recently said that the two markets “are likely to head into 2017 on different trajectories” — Toronto up and Vancouver flat — and a senior BMO economist has suggested that Toronto could soon be Canadian real estate’s “unquestioned leader.”
Canada’s two other top markets for $1-million-plus home sales are Montreal and Calgary, and heading into the fall Sotheby’s anticipates subdued activity in those cities. It sees modest, healthy growth being sustained in Montreal, while further price declines are expected in Calgary, despite earlier predictions.