In the midst of the unsteady nature of the stock market, and various trade issues, Toronto’s population growth, and consistent history of outstanding employment should give realtors hope for the coming year.
The country’s luxury real estate market may be primed for some consistency in 2019, amidst aforementioned signs that say otherwise. Toronto’s real estate and economy has blossomed to a point where housing prices that would be seen as lavish, luxurious, and expensive in other cities, is a commonality in Toronto.
This point is perfectly illustrated in the fact that the average detached home in the Toronto region sells for approximately $1 million or more. Due to the high real estate prices, President Trump imposing high tariffs on international trade would not affect people in the United States as much as losing your job in Toronto.
Sotheby’s International Realty Canada is one of the company’s that have publically announced their optimism for Toronto’s economic future, and in their 2018 Year End Real Estate Report, they highlighted the city’s low 3.4% increase in GDP, the economy expanding at a pace of 2.3%, the unemployment rate dropping to 6.2%, and the population surpassing the average national rate of 1.4%, and hitting 2.5%.
Sales volume trends in the second half of 2018 are a much better reflection of the region’s top-tier market trends, as year-over-year comparisons of the previous two years sales volumes prove to be an adequate source of information, due to new mortgage requirements that had a direct impact on the wavering first quarter sales of 2018. In addition, peak sales volumes in the first quarter of 2017 were also recorded, which took place before the influence of the Ontario Fair Housing Plan.
“The company noticed a 31% drop in residential real estate sales for homes priced over $1 million, but also cited that the sales of homes at that price in the last half of 2018 was 4% higher than the last half of 2017.”
Interestingly enough, the high housing prices resulted in condominiums becoming an option for homeowners. Due to the urgency of demand, the top-tier condominium market in Toronto outclassed lower density residential housing options for homes priced $1-2 million. This trend will seemingly continue as many of the aging baby boomers are electing to live high-density housing, as these condominiums have become more affordable. Toronto’s housing market dropped with the 2017 introduction of Ontario’s Fair Housing Plan, which implemented a foreign buyer tax.
There was a 16% drop in the number of resale home transactions when comparing 2018 to 2017.
In essence, those involved in the real estate market should be optimistic, and confident, as 21% of homes listed for $1 million and above were sold higher than the listed price in the last half of 2018.