Sales of single-detached homes priced from $1-2 million have fallen 35 per cent year-over-year in Toronto and Vancouver, according to the 2018 RE/MAX Spotlight on Luxury Report. In contrast, sales of condominium apartments in the $1-2 million range continue to thrive in larger urban centres. Luxury condo sales climbed two per cent in Toronto, six per cent in Vancouver and 19 per cent in Victoria, a trend that is largely driven by baby boomers and millennials.
“Many Canadian baby boomers saw the strength of the real estate market over the past two years as an opportunity to cash in, downsize and upgrade into the luxury market for retirement,” said Christopher Alexander, executive vice president and regional director, RE/MAX INTEGRA Ontario-Atlantic Canada Region, in a press release. “We’re also seeing an emerging trend of millennials entering the lower end of the luxury condo market, as they tap into their inheritance to invest in this popular property segment.”
While luxury condo sales continue to climb, single-detached home sales in Toronto and Vancouver continue to be impacted by the foreign buyer’s tax. Single-detached sales in the $1-3 million range fell 37 per cent year-over-year in Toronto and 31 per cent in Vancouver.
“The foreign buyers tax has impacted overseas activity, opening more opportunities for local buyers to enter the luxury market,” said Elton Ash, executive vice president, RE/MAX of Western Canada. “As a result, local buyers are driving demand for luxury condos going into 2019, which is welcome news for developers in major city centres looking to build more properties.”
Canada’s main high-rise markets, Toronto and Vancouver, saw annual increases in most expensive condo units on the market. In Toronto, the most expensive condo sold for $11.5 million in 2018, up from $8 million in 2017 (an increase of 44 per cent). In Vancouver, the most expensive condo sold for $11.7 million, up from $8.7 million one year ago (an increase of 34 per cent). Meanwhile, annual declines in the highest selling price of a condo were seen in Calgary (a decline of 53 per cent), Victoria (a decline of 47 per cent) and Oakville (a decline of 18 per cent).
For single-detached homes and condominium apartments in the $3 million+ range, Vancouver saw sales decrease by 45 per cent and 13 per cent year-over-year, respectively. Meanwhile in Toronto, single-detached homes in the $3 million+ range fell 44 per cent annually, while condo sales remain unchanged.
In Oakville, both luxury home and condo sales in the $1-2 million range fell by 30 per cent and 14 per cent, respectively, due in part to lower inventory levels.
In Victoria, condominium apartments ranging from $1-2 million saw sales climb 19 per cent year-over-year, while condos in the $2-3 million range saw sales jump 67 per cent annually. However, condos priced over $3 million saw sales fall 40 per cent.