After Plunge in Early 2018, Sales of High-End Homes Expected
to Post Moderate Gain in Spring 2018
Sotheby’s says a lack of down-sizing home options in Toronto and new taxes in Vancouver have stalled some moves.
The first months of the year have seen a deep plunge in sales of high-end homes — a real estate category that is supposed to be largely immune to the day-to-day policy jitters and new lending rules that inhibit the average buyer.
But the dramatic descent in sales — a 55 per cent decline year-over-year in January and February in $1-million-plus properties in the Toronto area, and a similar decline in $4-million-plus homes — is actually a statistical aberration because of last year’s scorching home sales and prices, says Brad Henderson, CEO of luxury property purveyor Sotheby’s International Realty Canada.
He is predicting small to moderate sales gains through in later spring based on the slight rise in average price in some homes this year, and the continuing heat in the condo sector and detached houses, particularly in the City of Toronto.
Nevertheless, Henderson said, “There’s no question that the market has been more cautious over the last little while.”
A Sotheby’s report on Wednesday suggests that Montreal is a shining star on the Canadian luxury home market with sales of $1-million-plus properties rising 20 per cent year over year in January and February and a shortage of supply even prompting bidding wars in some places.
(Henderson acknowledges that $1 million to $2 million is actually closer to average than luxury when it comes to property in cities like Toronto and Vancouver.)
Montreal’s success is a matter of that city coming into its own with political stability, high employment and high demand, he said. It is not booming because buyers are seeking refuge from the Toronto and Vancouver markets, said Henderson.
“Montreal has always suffered from a bit of political uncertainty and those uncertain times have been, for the most part, quite dormant over the last little while,” he said.