Luxury home sales in Toronto climbed in the first 10 months of 2019 and, with momentum continuing to build in the market as the year winds down, the outlook for 2020 is looking more and more promising.
Much like the rest of the city and surrounding region’s housing market, luxury real estate took a big dip in market activity in 2018 after a spectacular — though ultimately unsustainable — 2017 performance. This year started slow, but activity has crept higher in recent months led by strength in Toronto proper where freehold sales over $5 million jumped 26 percent between January and October 2019 when compared to the same period in 2018.
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Re/Max, which released a high-end market report with commentary earlier this month, believes that better days are still ahead for Toronto luxury housing.
“The fog has lifted – buoyed by solid economic factors, but also by the belief that the worst is behind us,” says Christopher Alexander, executive vice president for the brokerage. “The housing market has shifted into recovery mode. Luxury home sales are climbing, prices are stabilizing, and demand is on the upswing for upscale product.”
And Alexander has other reasons to be optimistic about the Toronto luxury market heading into the new year too.
For one, Re/Max has observed that buyers from Mainland China are gradually returning to the GTA’s luxury market following a period of inactivity after the foreign-buyer tax was introduced in 2017.
“During the run-up in 2016 and 2017, Chinese buyers were responsible for an estimated 60 per cent of home-buying activity over the $6 million price point,” Re/Max says in a media release.
Strong demand from high-net-worth Canadians and wealthy immigrants is also set to stoke demand for luxury real estate in 2020. In its report, Re/Max cites data from the Economist Intelligence Unit that projects that the number of high-net-worth-individuals in Canada will double over the next decade. The brokerage also cites anecdotal evidence of increasing interest in Toronto luxury properties from Hong Kong investors as the political conflict in the autonomous Chinese region intensifies.
“While home sales in the luxury segment are off peak levels reported in 2017, great strides have been made over the last six months,” says Alexander.
“We are heading in the right direction. The momentum is expected to continue, with increased demand for high-end product in 2020 propping up values as well. The insatiable appetite for luxury homes has subsided, but healthy demand still exists in the GTA.”