Sales activity in the luxury market is up, but there is a shortage of new condo projects geared toward the luxury and ultraluxury buyer in the GTA.DREAMSTIME PHOTO
GTA real estate sales over $1-million were up 23 per cent in 2019
After a tentative start to 2019, the Greater Toronto Area led the country in top-tier real estate performance with consistent and confident increases in sales activity and pricing, bolstered by the region’s strong population gains, healthy economic growth and robust labour market, says a report by Sotheby’s International Realty Canada.
The luxury market in the GTA, which includes Toronto and Durham, Halton, Peel and York regions, thrived in 2019 with residential real estate sales of condominiums, attached and single-family homes over $1-million increasing 23 per cent year-over-year. The City of Toronto continued to see $1-million-plus activity escalate in 2019, with sales over $1-million increasing 20 per cent, according to the report.
“There’s a lot of multiple offers,” says Don Kottick, president and chief executive officer of Sotheby’s International Realty Canada.
“We got off to a phenomenal start in January. Last year started off the first six months slow and then in the last six months we really picked up momentum and that momentum carried through the holiday season and into January. So we didn’t have a traditional slowdown,” Kottick says.
Fuelling the demand is migration to the GTA as the area has become a global destination plus it has momentum right now with strong economic growth. Kottick says this is the place where people want to be and that’s driving the luxury market.
Mimi Ng, senior vice-president of residential sales and marketing for Menkes Developments Ltd., says the luxury condo market in the GTA is fairly tight right now. There is a lack of supply, with the market seeing a real shortage of new condominium projects geared toward the luxury or super-luxury buyer segment.
“Unlike first-time buyers or move-up buyers, who are motivated to make purchasing decisions quickly due to their life circumstances, … luxury buyers are typically much more patient and willing to wait for the right building and the right unit,” she says.
“Purchasers at the top end of the market are well established and comfortable in their current living arrangements, and they won’t move unless every criterion for their next home purchase is met. As an example, a few years ago we developed a project called Pears on the Avenue, which was geared towards households downsizing from Forest Hill and the Annex. It was not uncommon for people from the neighbourhood visiting our sales presentation centre to say that they have been looking for a condo and thinking about moving for over five years.”
Ng says the developer has noticed a small component of luxury buyers downsize from their detached homes in Midtown or North Toronto into downtown condominiums and really embrace the downtown lifestyle.
“But I would say that the majority of luxury buyers prefer buildings in neighbourhoods like Yorkville, Forest Hill, South Hill or Rosedale, because that is where they already live and they want to remain close to their existing social network. The challenge in these neighbourhoods is that they are already built up and there are not many condominium site development opportunities. With this target market in mind, Menkes and Pinedale Properties are developing a five-storey condominium called 77 Clarendon, located off of Russell Hill Road, south of St. Clair Avenue West. 77 Clarendon will be an intimate building of just 15 residences ranging from 3,000 to 6,000 square feet, and is slated to launch this spring.”
Janice Fox, broker of record for Hazelton Real Estate, agrees that there is a lack of inventory these days in the luxury GTA market both in houses and in condos.
“They sell reasonably quickly if they come up,” she says. “I think there’s been a tremendous growth in personal wealth. Software. Bay Street. Business is good. The economy here has been good over the past number of years and there’s a lot of people who have made a lot of money and are happy to spend it on real estate.”
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