As luxury residential markets from oversupplied New York to post-Brexit London begin to cool, Toronto and Vancouver remain red hot, according to a new market report.
Sales or residential properties over $1 million in the Greater Toronto Area rose to 10,172 units in the first half of 2016, a 65% increase from the same period last year, the greatest year-over-year gain out of Canada’s major metropolitan areas. The figures are part of a mid-year report released Thursday by Sotheby’s International Realty Canada.
“Demand for luxury real estate in Toronto and Vancouver remains unrelenting, far outstripping supply in the higher price spectrums of the market,” said Brad Henderson, president and CEO of Sotheby’s International Realty Canada.
The report, which covers the $1 million-plus real estate markets of Vancouver, Calgary, the Greater Toronto Area (GTA), and Montreal, attributes the frantic activity to a lack of inventory, which, in turn, is causing gridlock in the top-tier market.
The biggest gains were in the most expensive segment. Sales of real estate over $4 million increased by 81% year-over-year in the Greater Toronto Area, to six properties, compared with four during the first half in 2015. Vancouver saw an impressive 100% jump in this same category, with 439 units in the $4 million-plus range changing hands.
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Rise in luxury sales in Vancouver
Double-digit price gains in Vancouver did little to tame luxury sales. A total of 3,111 properties that were over $1 million sold in the first half of the year, up 26% from the first six months of 2015.
In terms of property type, condos reigned. Vancouver’s $1 million-plus condominium market outperformed all other major Canadian cities, with a 95% annual sales increase.
Healthy consumer confidence and robust demand helped Toronto record the biggest annual gain in sales of detached single-family homes in the country, rising 66% to 9,132 units, according to the report. The average price of single-family homes in the city was $1.3 million in May, an increase of 15.2% from the same time a year ago.
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Increased sales in Montreal; mild growth in Calgary Montreal, for its part, saw total sales of $1 million-plus properties increase by 16% to 317 units, due to political stability in the city, the report found. Condos were the most popular housing units, with 23% more sales than a year ago.
The mildest growth was seen in Calgary, whose market is impacted by specific factors, such as uncertainty in the energy sector, a rising unemployment rate and a decrease in net migration, according to the report. Condo sales there decreased by 38%. Still, single-family transactions managed to achieve 13% year-over-year growth, with 287 units.
The outlook for the remainder of the year is of more sales gains for both Toronto and Vancouver, according to the Sotheby’s report.
“Local and international demand continues to reinforce both markets’ position as global real estate market leaders,” the brokerage stated.
Sales of $1 million-plus properties, in number of units
| Area | Greater Toronto | Vancouver | Calgary | Montreal |
| 1st. Half of 2016 | 10,172 | 3,111 | 318 | 317 |
| % change from 2015 | 65% | 26% | 9% | 16% |
Source: Sotheby's International Realty Canada