Sales of ultra-luxury homes boomed in Toronto and Vancouver through the first half of 2016 and held their own in Calgary and Montreal, according to high-end real estate firm Sotheby's International Realty Canada.
Sales of homes costing more than $4 million doubled in Vancouver and climbed 81 per cent in the Greater Toronto Area when comparing year over year numbers ending July, 2016.
In the $1-million-plus bracket, sales soared 65 per cent in the GTA, 26 per cent in Vancouver and 16 per cent in Montreal.
Even in a Calgary economy battered by low oil prices, sales of million-dollar-plus homes climbed 9 per cent.
Sotheby’s expects the luxury market to continue to be sustained by consumer demand, confidence in real estate as an investment, low interest rates and the low Canadian dollar that is driving international demand. Those factors will be particularly evident in Toronto, where summer sales were higher than expected.
"Vancouver's record-setting sprint will return to a more moderate pace, but Toronto's market cadence is set to accelerate,” said Brad Henderson, president and CEO of Sotheby's International Realty Canada.
The GTA (made up of Toronto, Durham, Peel, Halton and York) saw sales of $1-million single family homes in July and August climb 83 per cent, compared with a year ago, to 3,026, and 55 per cent to 959 in the City of Toronto itself.
But summer definitely saw a cooling off from a heated sellers’ market in Vancouver, with sales of single-family homes over $1 million in July falling 30 per cent compared with a year ago to 193. In August, sales were down 65 per cent compared with a year ago, falling to 95.
Vancouver condominium sales over $1 million in July totalled 93 -- up 29 per cent from a year ago -- but sales in August fell 49 per cent compared with the same month last year, dropping to 40.
Vancouver’s 15 per cent tax on foreign homebuyers, which took effect Aug. 2, has been widely predicted to dampen international investment interest. But, Sotheby’s says, “It is still early to make widespread predictions about its long-term effect on top-tier Vancouver real estate. Despite temporary uncertainty, the city's market fundamentals are robust and resilient, leading to anticipation that the market will return to more normalized, but healthy levels of activity in spite of changes to tax policy.”
The firm expects Vancouver’s market to continue to cool, though British Columbia’s anticipated economic growth, strong labour market and net migration will bolster housing demand and consumer confidence in the city, say Sotheby’s.
Sotheby’s is less optimistic about Calgary, where it says, “Steeper price declines will take place in Calgary's $1 million-plus real estate market, the outcome of continued job losses, wage uncertainty, higher vacancy rates and migration from the city.”
The firm expects sales activity in the Alberta city to slow throughout the fall and that prices will drop further as supply mounts.
Canada's position as a "political, social and financial haven will attract more international interest into its top-tier markets," says Sotheby's. Vancouver, Toronto and Calgary were also recently ranked third, fourth and fifth of 140 cities on the Economist Intelligence Unit's annual livability index.
