Sales of luxury homes fall 35% in Toronto and Vancouver

Luxury home sales in two of Canada’s most expensive markets are down from a year ago, as the high-end real estate market feels the effect of foreign buyers taxes.

In an annual report, realty brokerage Re/Max says sales of single-detached homes priced from $1 million to $2 million fell 35% from a year ago in both Toronto and Vancouver.

Single-detached homes in the $2-million-to-$3-million range were down 50% in Toronto and 22% in Vancouver.

Homes that were sold for more than $3 million dropped 44% in Toronto and 45% in Vancouver.

Ontario and B.C. have introduced foreign buyers taxes, while B.C. has also increased property transfer taxes and school taxes on homes over $3 million.

Although luxury home sales are weakening, sales in the low-end of the luxury condo market in the cities saw increases driven mainly by millennials who are using their inheritances and baby boomers looking to downsize, the report said.

Condo sales in the $1-million-to-$2-million range were up 2% year over year in Toronto and 6% in Vancouver. Calgary saw condo sales in this price range jump by 3%, while Victoria sales climbed 19%.

The most expensive condominium sold in Toronto in 2018 so far was priced at $11.5 million, topping the $8 million that was paid for the most expensive condo sold in 2017. The priciest condo sold in Vancouver so far this year was $11.7 million, up 34% from the top price of $8.7 million paid last year.

Elton Ash, executive vice-president of Re/Max of Western Canada, said the tax on foreign buyers has impacted overseas activity, opening more opportunities for local buyers to enter the luxury market.

“As a result, local buyers are driving demand for luxury condos going into 2019, which is welcome news for developers in major city centres looking to build more properties,” Ash said.

The Canadian Press

The Canadian Press is a national news agency headquartered in Toronto and founded in 1917.