While luxury homes sales in the Greater Toronto Area (GTA), Oakville and Hamilton-Burlington have fallen short of last year’s record-breaking pace, this segment of the market will still see plenty of move-up activity in 2018. This is according to a report released today by RE/MAX INTEGRA Ontario-Atlantic Region.
The 2018 RE/MAX Luxury Property Report examined trends and developments in the GTA (freehold and condominium properties), Oakville and Hamilton-Burlington for the first two months of the year. The report found 76 freehold and condominium properties sold over the $3-million price point in the GTA between January 1 and February 28, down from 180 sales during the same period in 2017. In the $5-million-plus category, luxury sales fell 46 per cent to 15 transactions in the GTA, compared with 28 one year ago. Oakville reported slower sales in the first two months of the year as well, with six homes selling over $3 million, compared to 15 one year ago. Fifty-nine homes sold over $1 million in Hamilton-Burlington, down from 133 in 2017. Only condominium apartments and townhomes located in Toronto proper bucked the trend, with eight sales over $3 million so far this year, up from five during the same period in 2017.
“Sales of upper-end homes year to date are more in line with 2016 volumes rather than 2017, which should be distinguished as an outlier year for luxury real estate,” says Christopher Alexander, Executive Vice President and Regional Director, RE/MAX INTEGRA Ontario-Atlantic Region. “Any comparison will fall short of 2017 levels throughout much of the spring, but demand for luxury product is likely to improve by early summer and carry through to the remainder of the year.”
Although sales were soft in the earliest part of 2018, given consistent demand and limited supply, the core should continue to demonstrate growth. As evidence, two blue-chip neighbourhoods in the 416 area code outperformed last year’s hefty sales volume. These include 10 luxury properties sold in Rosedale (C09), of which the most expensive sold for $8.4 million; and four in the Kingsway/Princess Anne Manor area (W08).
The same is true for the GTA’s condominium market, with most sales taking place in the city centre and in close proximity to Bloor Street’s Mink Mile. This trend is in line with the precedent set by downsizing empty nesters and Baby Boomers. This group will continue to drive luxury condominium apartment and townhome sales in prime neighbourhoods such as Yorkville and the Annex, and will remain a strong segment of the market moving forward.
As the ranks of Canadian millionaires grow, so too should the appeal of bricks and mortar. The Capgemini World Wealth Report for 2017 notes the population of high-net-worth individuals (HNWI) in Canada — the vast majority of whom live in Ontario — rose 11.3 per cent in 2016 to 356,930, while net worth increased 11.7 per cent to $1.1 trillion (US). HNWIs worldwide have also realized substantial gains, with Asia-Pacific, the world’s largest HNWI market, reporting a 7.4-per-cent increase in population and an 8.2-per-cent increase in wealth.
From the standpoint of foreign investors, the combination of a strong US dollar and undervaluation from a global perspective, Ontario is ripe for investment. In fact, the GTA and the surrounding areas have stepped into the spotlight in recent years, often dominating the top positions in world rankings, including the best city in the world by The Economist and one of top 10 most innovative cities in the world by the Melbourne-based “Innovation Cities Index.”
According to Numbeo, a crowd-sourced property price comparison site, the price per sq. ft. for an apartment in Toronto’s city centre hovers at approximately $791.17 — making our world-class city look like a bargain by international standards.