Sotheby's: Toronto's luxury home market ended 2017 on a low note
A $20 million penthouse with views of downtown Toronto and Lake Ontario helped luxury condominiums shatter sales records in Canada last year, bucking a cooling trend in the rest of the housing market.
The 7,000-square-foot (650-square-meter) residence in the city’s Bloor Street area was the most expensive condo sold in the country in 2017, according to Sotheby’s International Realty Canada. Sales of condos with a price tag above $1 million surged 59 percent in Toronto, 27 per cent in Vancouver and 49 per cent in Montreal, pushing the number of units sold in three cities to 2,703.
Foreign buyers and affluent baby boomers looking to downsize helped keep condo prices growing at double-digit rates in Canada’s major cities in 2017. That’s in contrast to a slide in detached sales, which pulled down the market overall. Toronto house prices cooled for a seventh month in December amid tougher mortgage guidelines and other restrictions designed to curb runaway prices, while Vancouver is still recovering from an early 2017 plummet.
“We’ve seen a little bit of a stalemate between buyers and sellers particularly in single-family homes, but with many new condominiums coming onto the marketplace, it becomes a very attractive option not only for urban professionals but also for downsizers and investors,” Brad Henderson, chief executive officer of Sotheby’s International Realty Canada, said in a phone interview. “We see that trend continuing into 2018.”
Henderson points to the new Four Seasons Hotel and Private Residences Montreal project, which will include 18 luxury condos atop its 166-room hotel, as a prime example of demand in the city. Sustained growth in the local economy and job market combined with Montreal’s solidifying position on the global real-estate stage has intensified demand and activity, Henderson said.
“The price point that they’re marketing those projects at is at a new high for Montreal but given the location, the quality of the project that’s being built and its association with the Four Seasons hotel, they’ve been able to sell quite a number of them already,” he said, adding that around 40 to 50 percent of the units have already been sold pre-construction.
Calgary luxury condo sales fell 37 percent from 2016, a symptom of the low percentage of condos comprising the city’s luxury housing market, but sales of all homes above $1 million jumped 11 per cent as oil prices stabilized.
“Overall, Canada’s metropolitan top-tier real estate markets remained bastions of stability, in spite of intervention,” Henderson said.