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Sales of high-end homes in Toronto have surged this year, outstripping the growth in sales of more modestly priced homes.
Indeed, a number of markets across the country are seeing a strong pickup in the number of high-end homes that are selling. Real estate industry players say they think it’s because people are less worried about the housing market’s future.
“I think people are feeling confident that the real estate market isn’t going to face a major correction,” says Ross McCredie, the founder and head of Sotheby’s International Realty Canada.
It’s still a gamble, but one that it appears more wealthy individuals are now making.
A record 754 homes sold for more than $1.5-million in the Greater Toronto Area during the first four months of the year, according to statistics from the Toronto Real Estate Board compiled by Eva Blay-Silverberg, a principal at Point Blank Communications who works with real estate data. For reference, she says that the corresponding number of homes that sold in that price range during the first four months of the year was 566 in 2013, 623 in 2012, 435 in 2011, 399 in 2010, 132 in 2009, 260 in 2008 and 250 in 2007.
So, sales over $1.5-million are up by more than 30 per cent from a year ago, while sales of homes at all price points in the GTA during the first four months of the year are up by about one per cent.
Realtor Barry Cohen, who has a listing in the Bridle Path area priced at $25.8-million, says his sales seem to be about evenly split between foreigners and Canadians.
“There is consumer confidence,” he says. Both he and Mr. McCredie said that while luxury buyers don’t tend to take out large mortgages, they take note of interest rates as a reflection of where the market will head.
“You’ve got low interest rates feeding the lower end of the market, and those sellers become the next buyers for luxury,” says Mr. Cohen.
“Last year people were really worried about what interest rates were going to do, whereas this year rates are low again and it doesn’t look like anything is going to change,” Mr. McCredie says. “It gives people confidence. Luxury buyers ask themselves, ‘If I buy this now, who is going to buy it from me in five years?’”
Vancouver, too, is seeing a resurgence in its high-end, Mr. McCredie says. “It is really bouncing back faster than anybody was expecting.”