Toronto’s luxury housing sector has enjoyed a marked upswing in activity this year, according to a new analysis by RE/MAX.
Accelerated sales came about as a result of a stronger economy and record-low unemployment levels, along with more relaxed interest rates and generous returns in the stock market.
“The fog has lifted – buoyed by solid economic factors, but also by the belief that the worst is behind us,” RE/MAX of Ontario-Atlantic Canada executive vice president and regional director Christopher Alexander explained.
“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.”
Transaction numbers in the highest-end sector exceeded 2018 levels, with sales of freehold and condo properties valued at more than $5 million reaching 100 units from January to October. This represented an 8.5% annual increase.
Freehold properties in this price bracket now fetch an average value of $6,517,143. This is in contrast to the 3% year-over-year decline seen in the city’s single-detached housing market.
“The one consistency in Toronto’s real estate market throughout 2019 has been value – and it’s evident from the bottom end of the market to the top,” Alexander noted.
“Homebuyers at virtually all price points – including uber-luxe – are kicking the tires once again. As a result, momentum is building in the overall market, which is reflected in the escalation in sales at both the $2 million and $5 million price points.”
Sales of homes valued at more than $2 million went up by a little over 9% annually (reaching 1,975 transactions), while activity in the $3 million - $4.99 million sector slowed down by 4.7% year-over-year.
Fortunately for this segment, “sales of luxury properties between $3 and $5 million are expected to climb in the year ahead as the ripple effect works its way through various price points,” Alexander assured.
“Sales at lower price points tend to stimulate sales at the next level, as homebuyers trade-up to larger homes or more desirable neighbourhoods. Our research has found that the spread is narrowing with each month’s sales figures.”
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