Luxury home sales in Toronto climbed in the first 11 months of 2019 and, with momentum continuing to build in the market as the year winds down, the outlook for 2020 is looking more and more promising.
Much like the rest of the city and surrounding region's housing market, luxury real estate took a big dip in market activity in 2018 after a spectacular - though ultimately unsustainable - 2017 performance. This year started slow, but activity has crept higher in recent months led by strength in Toronto proper where freehold sales over $5-million jumped 26% between January and October 2019 when compared to the same period in 2018.
The real estate industry believes that better days are still ahead for Toronto luxury housing.
The fog has lifted - buoyed by solid economic factors, but also by the belief that the worst is behind us. The housing market has shifted into recovery mode. Luxury home sales are climbing, prices are stabilizing, and demand is on the upswing for upscale product.
There are other reasons to be optimistic as well. Buyers from Mainland China are gradually returning to the GTA's luxury market following a period of inactivity after the foreign-buyer tax was introduced in 2017. During the run-up in 2016 and 2017, Chinese buyers were responsible for an estimated 60% of home-buying activity over the $6-million price point.
Strong demand from high-net-worth Canadians and wealthy immigrants is also set to stoke demand for luxury real estate in 2020. It is projected that the number of high-net-worth-individuals in Canada will double over the next decade. While home sales in the luxury segment are off peak levels reported in 2017, great strides have been made over the last six months. The market is heading in the right direction. The momentum is expected to continue with increased demand for high-end product in 2020 propping up values as well. The insatiable appetite for luxury homes has subsided, but healthy demand still exists in the GTA.
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