After a historically slow spring season, homebuyers have returned to markets across Canada in droves during the post-lockdown period, even within the luxury housing sector.
“The whole luxury segment, I would argue, has been our best year up until this point,” said Matt Smith, a real estate broker with Engel & Völkers Toronto Central Brokerage.
In its national Canadian mid-year market report, high-end real estate brokerage Engel & Völkers noted a 30 percent year-over-year increase in closed sales volume, in addition to a 28 percent annual jump in average sales prices Canada-wide between January and June 2020. While luxury sales were a bit slower to get going after the economic reopening compared to the general market, demand has been on a steady upswing.
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“It took a bit for things to start, but now things are moving. If it’s priced right, and it looks nice, people are buying,” said Anita Springate-Renaud, License Partner and Broker of Record at Engel & Völkers Toronto Central.
The E&V report attributes record-low interest rates and a lack of inventory to the increase in home prices and demand.
“In terms of inventory, homes between $1 million to $2 million have more movement compared to those between $2 million to $4 million, but interest in both segments is strong as demand for space and living amenities increases through the summer,” explained Springate-Renaud in the company’s market report.
Smith told Livabl that the ultra-luxury markets in Toronto have also seen a dramatic increase in sales, with more than double the number of transactions in the $10-million-plus price segment compared to a year ago. A number of high-profile luxury properties have sold across Canada during the pandemic months as well, including a $28.8 million Bridle Path estate listed by RE/MAX Realtron Barry Cohen Homes Inc in late July.
Like in the under-$1 million category, buyer preferences in home features and amenities have shifted after the spring lockdown. Both Springate-Renaud and Smith pointed out that the switch to working from home and restrictions on international travel are a pair of COVID-related factors that have led buyers to reassess what they’re looking to buy.
“They want workspace, space for their kids to be able to work, places for them[selve] to be able to work,” Springate-Renaud told Livabl. “They’re looking for more of a home office setting and a homeschool setting.”
Rather than having multiple residences in different countries, Smith explained that luxury buyers have changed their approach. Instead, they’re seeking out more square footage and bedrooms, whether it be to accommodate additional family members or an at-home office. Interior-wise, the demand for separation between rooms and floors has also grown — single-storey properties, Smith finds, can allow for too much noise to travel, which can be an issue for those working at home.
“People love open concept, or they did. Not so much anymore,” he explained. “They want more rooms, more divisions in the home. Everybody wants to maximize their own privacy if they can.”
As city buyers shift their home search outside of urban centres, Smith noted that communities that provide year-round living are highly sought after, so long as there’s highway access to Toronto. Huntsville and Collingwood are a couple of the cities Smith said he’s been working in lately.
While a second wave in the pandemic presents the possibility of future challenges for the market, Smith estimates that luxury activity will remain strong. Even as the winter months likely bring a sales slowdown, he expects spring 2021 to be “a free-for-all,” depending on how the COVID-19 situation has evolved.
“As we’re moving into the fall market, people are returning back from Muskoka and Georgian Bay, luxury real estate is front of mind for them, and we expect it to continue,” he said.