Toronto and Vancouver luxury condo market bolstered by local buyers, downsizing retirees and Millennials
Sales of single-detached homes priced $1-2 million have declined in Toronto and Vancouver, down 35 per cent year-over-year, according to the 2018 RE/MAX Spotlight on Luxury Report. In contrast, the luxury condo market in the $1-2 million range remains popular, particularly in larger urban centres. Toronto experienced a two-per-cent increase in luxury condo sales, while Vancouver sales were up six per cent and Victoria luxury condo sales increased 19 per cent. These trends have been largely driven by Baby Boomers and Millennials.
“Many Canadian Baby Boomers saw the strength of the real estate market over the past two years as an opportunity to cash-in, downsize and upgrade into the luxury market for retirement,” says Christopher Alexander, Executive Vice President and Regional Director, RE/MAX INTEGRA Ontario-Atlantic Canada Region.
“We’re also seeing an emerging trend of Millennials entering the lower end of the luxury condo market, as they tap into their inheritance to invest in this popular property segment.”
While the luxury condo market soars, single-detached activity in Toronto and Vancouver continues to be impacted by the foreign buyer’s tax. Year-over-year single-detached sales in the $1-3 million range were down 37 per cent in Toronto and 31 per cent in Vancouver.
“The foreign buyer’s tax has impacted overseas activity, opening more opportunities for local buyers to enter the luxury market,” says Elton Ash, Executive Vice President, RE/MAX of Western Canada. “As a result, local buyers are driving demand for luxury condos going into 2019, which is welcome news for developers in major city centres looking to build more properties.”
Canada’s condo hot spots of Toronto and Vancouver saw year-over-year increases in most expensive condo units on the market. In Toronto, the priciest condo sold for $11.5 million in 2018, up from $8 million in 2017 (+44 per cent). Meanwhile in Vancouver, the most expensive condo sold for $11.7 million, up from $8.7 million in 2017 (+34 per cent). In comparison, year-over-year declines in highest selling price of a condo were seen in Calgary (-53 per cent), Victoria (-47 per cent) and Oakville (-18 per cent).
Other Key Findings:
- In Vancouver, single-detached homes and condos in the $3+ million range decreased year-over-year by 45 per cent year and 13 per cent.
- In Toronto, single-detached homes in the $3+ million range decreased year-over-year by 44 per cent, while condo sales remain unchanged.
- In Oakville, both luxury home and condo sales in the $1-2 million price range decreased by 30 per cent and 14 per cent, respectively, thanks in part to lower inventory levels.
- In Victoria, condos in the $1-2 million range experienced a 19 per cent increase year-over-year and condos in the $2-3 million range experienced a 67 per cent increase year-over-year. However, condos priced $3 million+ experienced a decline of 40 per cent.