Luxury Home Sales Set Records Across Canada

Written by Posted On Tuesday, 16 February 2021 00:00

In Montreal, a downtown luxury condo recently sold for $11 million, the largest MLS sale for a condo in the city’s history. In Saskatoon, a condo also set an MLS record, selling for $2.085 million – $810,000 more than the previous highest price.

In Prince Edward Island, a 13,000-square-foot mansion is attracting a lot of attention despite its $4.75-million price tag. In Ontario’s Thousand Islands, near the U.S. border, a private island with a century home on it is listed for $12.9 million.

The pandemic has been good for Canada’s luxury home segment.

“From coast to coast, Canada experienced unprecedented levels of domestic home trading,” says Anthony Hitt, president and CEO of Engel & Vӧlkers, in a report on luxury homes. “With borders closed, Canadian real estate proved it’s built on solid fundamentals. As it relates to home value, there is no question both fiscally and in sentiment, it’s never been greater in the Canadian market.”

The company is predicting that homes priced at more than $1 million will grow in value by 7.5 per cent in 2021.

It says low interest rates will drive the market, along with “a growing number of expatriates returning to Canada amidst growing uncertainty.” But it says Engel and Vӧlkers agents have noticed “an unprecedented level of interest from American buyers” as well.

While multi-million-dollar properties are selling across the country, luxury condos have seen a drop in sales prices in some areas, particularly in Toronto and Vancouver. A report by agent Sam Massoudi at Strata.ca says some of the reasons include Airbnb short-term rentals moving to the long-term market; the loss of student renters in areas like Toronto’s The Annex and Bloor-Yonge, forcing investors to sell; and the rise in remote work, which had buyers looking outside the downtown core.

The Engel & Vӧlkers report says that a “mass exodus” from Toronto’s condo market led to rising inventory and sales price drops “in the tens of thousands.” It says these conditions will likely remain until the borders reopen but adds that upward pressure on the market has already returned.

Toronto’s detached luxury home market is soaring, however. There were 314 detached homes

sold for more than $2 million in January 2021, compared to 113 in 2020 and 65 in 2019.

Re/Max of Ontario-Atlantic Canada says that in 2020, luxury home sales of more than $3 million set a new record in the Greater Toronto real estate market. More than 1,000 properties over the $3-million mark were sold. There were also 379 homes that sold for more than $4 million and 180 that commanded a price of more than $5 million.

“Domestic buyers were out in full force in the GTA housing market in 2020, offsetting a decline in international home-buying activity,” says Christopher Alexander, EVP of Re/Max Ontario-Atlantic Canada. “With this segment largely absent throughout much of the year, the overall strength of the market, in what was essentially nine months of activity, was pretty incredible.”

The Re/Max report says the flight out of the downtown core benefited Toronto’s suburban regions. Freehold sales at over $3 million surged in Halton (130 transactions), Peel (89) and York (180), all up considerably from the year before.

The City of Toronto, which has been hard hit by the pandemic, is considering adding to its already hefty municipal land transfer taxes for luxury properties. Homes priced at more than $2 million are currently paying 2.5 per cent of the sale price in municipal taxes, which is in addition to 2.5 per cent in provincial taxes. City council asked staff to see how much money could be raised by bumping the rate to 3.5 per cent for homes priced at more than $2 million. Based on 2021 sales projections, about $18.68 million could be added to city coffers.

The staff report warns that such a move could discourage homeowners from upsizing to “lower-end luxury homes” to avoid the tax, which “could potentially tighten housing supply for mid-value homes.” Council will consider the report during budget discussions.

Engel & Vӧlkers says Montreal was the most “pandemic-resilient metropolitan market” with a 19 per cent increase in transactions over $1 million compared to last year.

In Ottawa, “a September sale in the $4-million-plus category, closing at $4,825,000, is driving a flood of new listings at this price point.” The company’s Ottawa shop had 100 transactions for more than $1 million in 2020.

In Vancouver, “The number of units sold above $4 million consistently trended upward through 2020 up to year-end. Demand sustained through 2020, exemplified by a $6.4-million Point Grey home sold within one week in mid-December,” says the Engel & Vӧlkers report.

It says Victoria is “a market to watch” as 20 waterfront homes there sold for $4 million plus.

Each community has a different standard for measuring what would be considered a “luxury home”. For example, Realtor Michael Poczynek, who has co-listed the $4.75 million property in P.E.I., told REM magazine that “you can get 10-plus acres on the water with a barn for $500,000, a new house on the water for $685,000 and a property in Charlottetown for $400,000.

In Saskatoon, broker Jordan Boyes told REM that the $2.085-million condo sale is not the norm. “It’s common in other cities. In New York, Toronto and Vancouver it’s a day in the life, but here, where the average condo price in Saskatoon is $248,231, it’s a big sale.”

Back in Toronto, the Toronto Regional Real Estate Board forecasts that in 2021, the overall average selling price for all home types and areas combined will eclipse the $1-million mark. 

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Jim Adair

Jim Adair is editor of REM: Canada's Real Estate Magazine, a business publication for real estate agents and brokers. He has been writing about Canadian real estate, home building and renovation issues for more than 30 years. You can contact Jim at jim@remonline.com.

www.remonline.com/

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