Toronto’s wealthiest families are showing confidence in the real estate market. Toronto Real Estate Board (TREB) stats show that luxury sales are booming. While sales are down in the general market, sales of the most expensive homes in the city are actually up.
Luxury Real Estate Defined
The definition of luxury real estate changes from agency to agency. There’s “affordable luxuries,” like extra square footage, and build quality – that’s not what we want. What we’re looking for is true luxury, homes not within the realm of affordability for normal households. To do this, we’ll define luxury as homes over $2 million, a pre-defined category TREB tracks. It’s a simple definition, but a buyer spending at least 3x the normal home price in Toronto isn’t a paper millionaire. These are actual, factual rich people that are often more in tune with global economic trends.
Real Estate Sales Over $2 million Are Up
Sales of property over $2 million are up across the Greater Toronto Area (GTA). TREB counted 616 sales in April, a 74% increase from the same time last year. Breaking that down, detached units were 579 of those sales, which is over 93% of total luxury sales. Condo apartments was the fastest growing segment, experiencing a 125% increase from the same time last year. That’s only 18 units though, so I wouldn’t read too much into that trend yet.
Luxury Is An Increasing Part of Total Sales
Luxury sales represent an increasing number of total sales in the market. Units over $2 million represented 5.3% of all sales in April, up from 2.92% last year. Meanwhile the general market saw a decline of 3.75% for all sales. Typically wealthier buyers set trends, not buck them. So it’s worth keeping an eye on this segment of buyers.
An increase in sales above $2 million is an interesting divergence. The quality of high-ratio loans is on the slide, but luxury buyers are up. The general market is experiencing hesitance, but the city’s wealthiest families are showing confidence by increasing the number of buys. Should this be interpreted as a sign of market confidence, or a group of people that are less hesitant at the possibility of losing money? Leave your thoughts below.
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Photo: Michael Gil.