A record number of properties are selling for at least $1-million in Toronto and Vancouver, raising the threshold for what constitutes luxury.
"One million just doesn't buy you much in Vancouver proper or Toronto proper, for that matter, whereas in Calgary, Montreal and other markets, you can get quite a nice house," said Brad Henderson, president of Sotheby's International Realty Canada.
The average price in Greater Vancouver for detached houses sold last month reached $1.77-million, compared with $892,747 in Greater Toronto, according to the regional real estate boards.
It makes sense to reclassify luxury to mean roughly $3.6-million in the Vancouver region and $1.8-million in Greater Toronto, and even higher prices in posh neighbourhoods within city limits, Mr. Henderson said.
"In Toronto and Vancouver, there is strong optimism about the future, low unemployment rates and low interest rates. They are attractive places for non-Canadians to move, either permanently or to bring their kids over to go to some of the best schools in North America," he said in an interview Wednesday.
The commonplace sales for at least $1-million highlight the real estate boom in Canada's two largest housing markets, according to a new study by Sotheby's. In the category of transactions for $1-million or higher, there were 4,162 residential sales in the city of Toronto in the first six months of this year, a 35-per-cent jump from the same period last year, the company said.
In the Greater Toronto Area, 10,172 residential sales qualified for the $1-million club in the first six months of 2016, a 65-per-cent surge from the same period of 2015.
Sotheby's didn't provide statistics for Greater Vancouver, but it said that in the city of Vancouver, 3,111 properties sold for at least $1-million in this year's first half, up 26 per cent from the first six months of last year.
Royal LePage data show there were 12,160 properties that sold for at least $1-million in Greater Vancouver last year, up 67 per cent from 2014.
The City of Vancouver – a smaller housing market than its Toronto counterpart – saw 439 sales for at least $4-million in the first six months of this year, or double the 219 transactions from the same period in 2015. Sales in the city of Toronto in the $4-million-plus category climbed 63 per cent to 103 sales. The benchmark price, which excludes high-end sales, in Greater Vancouver for detached houses has surged 38.7 per cent over the past year, compared with an 18.8-per-cent ascent in Greater Toronto.
Some industry observers say buyers from China have played a key role in the housing boom in Vancouver, though Mr. Henderson points to a variety of factors, including limited supply – especially of detached houses. "What's driving the market now is there are more buyers than sellers," he said.
This spring, the average price in the city of Toronto for detached houses sold surpassed $1.2-million, compared with almost $3-million in the city of Vancouver. Sales of detached properties accounted for 85 per cent of total transactions valued at $1-million or higher last year in the Vancouver region, but sales of high-end condos and townhouses have been on the rise this year.
Last year, 4,298 detached properties that were sold within Toronto's city limits fetched $1-million or more, or 34 per cent of the total sales of 12,555, according to Royal LePage. By contrast, 3,599 properties sold for at least $1-million last year in the city of Vancouver, or a whopping 91 per cent of the total sales of 3,970.