The luxury housing market in the Greater Toronto Area (GTA) saw a significant increase in the final quarter of 2024, with sales of properties over $3 million rising by over 40% compared to the same period in 2023.
Re/Max Canada reported over 360 freehold and condominium properties sold in Q4, a noticeable rise from 259 sales in the same period last year.
“The impact of the first and second 50-basis-point rate cuts by the Bank of Canada radiated throughout the GTA in the fourth quarter, jumpstarting demand for high-end properties both within the city and suburbs,” said Re/Max Canada President Christopher Alexander.
“We’ve been expecting a surge in top-tier sales activity as the economic climate and corresponding pause in buying intentions prompted a build-up in pent-up demand. The fourth quarter did not disappoint.”
Record sales in GTA’s luxury real estate
Toronto proper accounted for 53% of luxury sales, with suppressed property values creating opportunities in ultra-luxury price ranges between $5 million and $7.5 million.
Properties over $5 million saw the most significant growth, with sales increasing by nearly 59% year-over-year. The $7.5 million and above category also saw gains, with sales up by 41%, while properties over $10 million remained steady compared to 2023.
Interestingly, almost half of all $5 million-plus sales occurred in suburban areas, indicating a growing preference for luxury homes outside the city core.
Catalysts driving growth
Several factors contributed to the resurgence of the luxury market:
- Lower interest rates. The Bank of Canada’s 100-basis-point reduction in 2024 fueled buyer enthusiasm.
- Stock market gains. Strong performances by the NASDAQ, S&P 500, and TSX boosted confidence among affluent investors.
- Easing inflation. Reduced economic pressures encouraged profit-taking, leading to investments in properties.
Luxury market outlook for 2025
Despite inventory challenges, rising buyer confidence and strong equity markets indicate continued growth in Toronto’s luxury market. Affluent buyers are becoming more active, and demand is expected to remain strong, especially for single-detached homes.
Additionally, wealth transfer between generations and increased interest from international buyers, including affluent Chinese immigrants, are likely to support the high-end market.
Alexander mentioned growing buyer optimism due to strong equity markets, lower interest rates, and Canada Mortgage and Housing Corporation extending insurance coverage to $1.5 million for first-time buyers. “This positive trend is expected to impact all price points, including the luxury segment, as younger buyers reenter the market,” he added.
He also acknowledged the potential influence of upcoming political changes in Canada and the United States on the market but remained optimistic about the future.
“With the current trends in place, we anticipate not only sustaining but surpassing the strong luxury activity seen in 2024 in 2025.”
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