There are favourable conditions for the segment, according to Sotheby's
The steady rise in inflation and a favourable interest-rate environment continue to strengthen demand for Canadian real estate as an investment vehicle, according to Sotheby’s International Realty Canada.
This is particularly apparent in Toronto. During the spring market, the $1 million-plus luxury condominium segment saw sales increase by 120% and 72% in the GTA and the City of Toronto, respectively, Sotheby’s said.
“Following a year that saw luxury residential sales over $4 million soar 224% year-over-year in the Greater Toronto Area (Durham, Halton, Peel, Toronto and York) to record highs in 2021, the chasm between prospective buyers’ insatiable demand and scant supply widened further in the initial months of 2022, extinguishing potential activity while igniting bidding wars and price escalation,” Sotheby’s said in its latest wide-ranging market report.
Amid robust consumer confidence and sustained demand, the $4 million-plus residential real estate segment saw a 30% annual increase in activity during Q1 2022.
“Overall, GTA top-tier real estate sales over $1 million were up 11% year-over-year to 15,209 properties sold in the first quarter 2022,” Sotheby’s said.
Read more: RBC on divergent housing market trends across Canada
The first months of 2022 provided additional momentum to the already burgeoning market, amid relaxed pandemic-era restrictions that have spurred the desire for urban living, Sotheby’s said.
Another major draw of the market is the presence of higher-quality assets compared to other regions.
“The region continues to raise the bar for ultra-luxury condominium design, architectural excellence, smart home technology, amenities and services for Canada, as renovations and new construction adapt to increasingly elevated tastes of cosmopolitan, ultra-high-net-worth and largely local buyers,” Sotheby’s said.
“Intense demand for top-tier single family housing in the initial months of 2022 overwhelmed available supply, as bidding wars and price gains continued to spiral upward in the GTA.”
