Demand for luxury properties on the rise in the Greater Toronto Area
The luxury real estate market in the GTA seems to be very well poised currently. The demand for luxury homes in the region has never been as high as it is right now. In fact, recent figures show that the luxury real estate market in the Greater Toronto Area has grown tremendously over the last year.
Markets Insider reports that sales of condos priced between $1-2 million increased by 85% year-on-year for the period between January-July 2017. The sales of condos priced between $2-3 million also increased by 64% for the same period. In comparison, the sales for detached homes priced between $1-2 million in the GTA also increased by 25% year-on-year for the first 7 months of 2017. Detached homes priced between $2-3 million also demonstrated an increase of 37% year-on-year for the same period.
These figures show just how well the luxury real estate market in the Greater Toronto Area is performing at present. The real estate market for several other regions in Canada is also growing, but not at the pace of the GTA. For the first 7 months of 2017, Victoria, Calgary and Oakville also demonstrated a rise in the demand for luxury properties. However, the growth for all these regions, barring Oakville is far smaller as compared to the Greater Toronto Area. On the other hand, Vancouver’s luxury real estate market demonstrated a decline during the first 7 months of 2017. This is in stark contrast to the trends that the real estate market has demonstrated in other regions.
This rise in the demand for luxury properties in the GTA can largely be attributed to the market price appreciation. Over the last year, more condos met the high dollar threshold, while inventory levels failed to keep up with the demand. This price appreciation and the limited availability of high-value properties motivated many baby boomers to sell their current homes and move to luxury homes.
Another factor that has contributed to the growth of the luxury real estate market in the GTA is the Ontario Government’s Fair Housing Plan. The plan, which was introduced earlier this year, aims to make housing more affordable, protect renters and buyers, increase supply and bring stability to the region’s real estate market. While the long-term impact of this plan is yet to be determined, this plan has certainly given the luxury real estate market a welcome boost in the short-term.
Christopher Alexander, Regional Director of RE/MAX INTEGRA, Ontario-Atlantic Canada Region states that the demand for all luxury properties in the GTA increased by 30% year-on-year during the first 7 months of 2017. However, in the recent months, several buyers in the GTA are playing the wait-and-watch game to determine where the market is headed with the new Fair Housing Plan in place. The number of people waiting it out is also a positive sign for the market as it indicates that many people are looking to invest in luxury properties.
While the lower end of the GTA’s luxury real estate market has shown an increased demand, this is also true for the upper end of the market. During the first 7 months of 2017, sales for single-family detached homes priced over $3 million grew by 55% year-on-year. In particular, the suburb of Oakville demonstrated a tremendous 112% year-on-year growth for sale of properties between $2.5-3 million. More buyers are entering the market because Oakville lies in close proximity to Toronto and boasts of some great local schools.
Elton Ash, Executive Vice President of RE/MAX, Western Canada Region states that more developers are turning their attention to luxury condo projects in the GTA. As such, in the coming few years, we can anticipate many more luxury homes entering the Greater Toronto Area’s real estate market.
Many real estate experts estimate that this trend of increased demand for luxury properties in the GTA will continue through to the end of 2017. The luxury market is quickly becoming one of the biggest real estate markets in Canada. Now is probably one of the best times to enter the luxury real estate market in the Greater Toronto Area.