Toronto's luxury housing market experiences a decline in sales, with properties valued over $4 million witnessing a 34 percent drop year-over-year, as reported by Sotheby's International Realty Canada. The city's status as a financial hub provides some resilience, but buyers and sellers seek increased confidentiality through targeted marketing strategies. While interest rate hikes affect affordability and discourage conventional market adjustments, buyers may take advantage of the market in the fall. The trend is not exclusive to Toronto, as other major Canadian cities like Vancouver, Montreal, and Calgary also report varying degrees of sales decreases for high-end properties.
A recent report from Sotheby's International Realty Canada reveals that luxury home sales in Toronto experienced a decline in the first half of the year. According to the report, 157 properties priced above $4 million were sold on the Multiple Listings Service (MLS), marking a significant 34 percent decrease compared to the previous year. In addition, the number of properties sold for over $10 million decreased from seven last year to five during the same period this year. The category of homes valued at over $1 million experienced a significant 27 percent decrease in sales due to the impact of interest rates and economic uncertainty. Throughout the Greater Toronto Area (GTA), home sales in this price range also dropped by 29 percent.
However, Don Kottick, President and CEO of Sotheby's Canada, pointed out that the luxury market may be performing better than the numbers suggest. This is because an increasing number of sales are happening through private and targeted sellers rather than the traditional Multiple Listings Service (MLS). As a result, there is a "general but incomplete" picture of the luxury home market, as stated by Sotheby's. Tracking these trends is challenging, but it is a noticeable pattern within their own organization.
The report highlights that even though the economy and housing supply problems have created uncertainty in various markets, Toronto's status as Canada's financial centre has been advantageous for its luxury real estate market. Sellers and buyers in the area are now opting for increased confidentiality by utilizing targeted local and global marketing strategies to connect with qualified buyers.
The report did not provide specific information about whether homes were being sold below their listing prices. However, it did emphasize that certain markets, particularly luxury condominiums, are currently more advantageous for buyers.
In the Greater Toronto Area (GTA), luxury condominiums priced above $4 million experienced a sales increase of 24 percent, whereas sales of condos over $1 million dropped by 42 percent.
Similar trends of sales declines were observed across Canada. In Vancouver, luxury home sales valued over $4 million decreased by 18 percent, while residential sales over $1 million were down by 25 percent. In Montreal, properties valued over $1 million saw a decline of 28 percent, and in Calgary, there was a 10 percent decrease in sales for similar high-end properties.
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