The Rising Costs of Toronto’s Real Estate
Not so long ago luxury real estate in Toronto started at $1 million. Today, a prestigious address with high-end finished & fittings will cost more than twice as much.
With the average Toronto detached home selling for $1.26 million in June, house hunters seeking real luxury are actually buying well beyond the $2 million range, said managing broker of Sotheby’s International Realty Canada.
Even buyers bidding on homes over $2 million are subject to the heartbreak of Toronto’s bidding wars & bully offers. The number of homes that sold for over $1 million in Toronto during the first 6 months of this year, actually exceeded the only hotter Canadian market in Vancouver. The strongest sales volume increase in the GTA was in the $4 million plus category. Although it accounts for a relatively small number of sales, the category increased 81% in the first 6 months of this year. That is 134 super luxury homes between January & June, compared to 74 in the same period last year, including detached & attached homes as well as condos.
Sales of detached single family homes that cost over $4 million were up 79% year over year. It’s not a matter of buyers in the lower price category being pushed past the $2 million mark. If a buyer can’t afford the luxury they want in the city they will move further out or find an alternative such as a high end condo.
Simply but there are people that have a lot of money & consumer confidence is high. People today are used to living well because we’ve had such a good economy for so long & they can afford it. There are a lot of people who are getting these huge inheritances. They have their own money plus they have money trickled down from family inheritances.
Foreign investment & a relatively low Canadian dollar are expected to continue driving the scorching Toronto & Vancouver property scenes. This, along with the persistence of low interest rates & continued local consumer confidence & activity, will drive the $1 million plus real estate market into the second half of 2016.
If we had more inventory the industry would feel a lot better about people being able to purchase homes comfortably. It doesn’t look like we’re going to get a lot on the market going into the fall. For every house on the market you’ve got 10 buyers.
Source: MetroNews – July 2016
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