Sales of C$1 million-plus (US$749,916) homes in Toronto outpaced those in Vancouver this year, surging by 70% as a result of increased demand among local trade-uppers.
According to RE/MAX, a real estate company, 18,032 homes worth C$1 million or more changed hands in Toronto in the first nine months of the year, compared with 10,578 in the same period a year earlier. In the C$3 million-plus (US$2.25 million) price bracket, sales skyrocketed by 86%.
This was largely due to overall price appreciation in the market, driven by low inventory and high demand for single-family homes, which has resulted in more homes meeting the higher dollar threshold.
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At the same time, rising house prices throughout the housing market as a whole have enabled homeowners who want to trade up to build up enough equity in their first or second homes to purchase a high-end homes.
"Demand for luxury homes remains very strong in the Greater Toronto Area, driven mainly by local move-up buyers," said Pamela Alexander, Toronto-based CEO and regional owner of RE/MAX Integra.
She added that although foreign buyers continue to play a significant role in Toronto’s real estate, speculation that offshore money would overflow the city’s housing market after Vancouver imposed a 15% tax on foreign buyers has not yet materialized.
In Vancouver, meanwhile, sales of C$1 million-plus homes rose at a more modest 12% from 5,553 to 6,212 over the same period as the tax on foreign buyers implemented by the provincial government in August has resulted in slowing demand for single-family detached homes from offshore purchasers.
"Vancouver’s high-end market has experienced a slowdown in the past several months after a period of record-breaking sales," said Elton Ash, regional executive vice president, RE/MAX of Western Canada.
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"Part of this may be due to the tax on foreign buyers that was introduced in August, though there may be other factors at play as well, such as higher inventory lessening buyers’ sense of urgency."