Photo: James Bombales
While the GTA housing market saw activity fall across all property types in the first quarter of 2018, one market was hit harder than others.
According to data from Royal LePage, Toronto luxury property sales fell 68 per cent year-over-year in the first quarter of 2018, down to just 90 transactions. The city also fell from 11th to 18th place on Knight Frank’s international luxury housing market index.
Why the steep drop in sales? A new mortgage stress test implemented on January 1 and a rising interest rate environment could have something to do with it. But according to Toronto-based realtor Jimmy Molloy, it’s the year-over-year comparisons that are making the drop seem so dramatic.
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“When you look at what activity was like this time last year, that was an anomaly,” Molloy tells BuzzBuzzNews. “As we move forward into the year, you’re going to see the year-over-year comparisons start to change.”
According to Molloy, Toronto’s red hot housing market reached its peak in April, before coming back down to earth after the implementation of the province’s Fair Housing Plan, and its 15 per cent foreign buyers tax.
“April was the peak last year, so the numbers from May should start to fall in line with what we’re used to,” he says.
What’s more, Molloy says that the luxury market’s prices will likely stay high, buoyed by a strong demand, and a lack of supply.
“The demand is still there for luxury properties in the GTA,” he says. “There are only so many of these kinds of properties available, so you’re still going to see multiple offers on million dollar homes.”