Houses under construction in Toronto on Friday, June 26, 2015. Sotheby's International Realty Canada says Toronto is poised to lead the country in high-end home sales for the third consecutive year. THE CANADIAN PRESS/Graeme Roy
Toronto is poised to lead the country in high-end home sales for the third consecutive year in 2017, according to Sotheby's International Realty Canada.
The realtor released a report Wednesday that looked at sales of homes for more than $1 million in Toronto and three other cities — Calgary, Montreal and Vancouver.
It concluded that 19,692 such properties were sold last year in the Greater Toronto Area — an increase of 77 per cent compared to 2015. Sales of luxury homes — those worth more than $4 million — in the GTA rose 95 per cent year-over-year to 290 homes.
There is a confluence of factors responsible for the red-hot growth in Toronto's top-tier real estate market, said Brad Henderson, president and CEO of Sotheby's International Realty Canada.
Among them are low interest rates, strong employment and consumer confidence, and a limited supply of properties for sale, particularly in the single-family home segment.
"With natural boundaries like the lake and the Greenbelt, the Greater Toronto region has less developable land than other markets," Henderson said. "As a consequence, there are less opportunities to add to the supply."
In Vancouver, high-end home sales started off strong but slowed in the second half of the year as a number of government policy changes took effect. They included a one-per-cent tax on vacant homes implemented by the City of Vancouver and the B.C. government's 15 per cent tax on foreigners buying homes in Metro Vancouver.
Those changes amplified a cooling in the Vancouver real estate market that started over the summer, Sotheby's said.
Sales in Vancouver's $1 million-plus market were down 34 per cent year-over-year in the second half of the year compared to the same period in 2015. But on an annual basis, sales of Vancouver homes worth $1 million or more were relatively flat last year, down one per cent year-over-year to 4,515 properties.
Luxury home sales were up 36 per cent year-over-year in the city, with 573 properties priced at over $4 million trading hands.
Sotheby's predicts that the Vancouver market for $1-million-plus homes will remain stable in the first quarter of this year.
Calgary's $1-million-plus market also saw a boost last year. After declining 40 per cent year-over-year in 2015 due to the sudden plunge in oil prices, sales of homes worth $1 million or more were up 19 per cent to 612 properties in 2016.
Sotheby's Canada says it's expecting a buyers' market in Calgary in the first quarter of the year as the city's economic challenges drag on.
In Montreal, high-end home sales increased 23 per cent year-over-year to 613 properties, thanks to a stable provincial economy and political landscape, Sotheby's said.
The realtor says global turmoil — including Britain's vote to exit the European Union and Donald Trump's election win in the U.S. — injected uncertainty into global real estate markets last year.
Canada, which is regarded as a safe haven, has a low dollar and a strong real estate market, making it a desirable destination for real estate investment and immigration, the report said.
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Alexandra Posadzki, The Canadian Press