Brutal winter has helped buoy demand for low-maintenance, high-end condos

Susan Pigg – Toronto Star

The GTA high-end real estate market is roaring along, with sales of properties over $1 million up 34% in the first half of 2014 over a year earlier, matching gains in the country’s priciest market, Vancouver, according to a new report by Sotheby’s International.

The biggest jump, surprisingly enough, was in the sale of $1 million-plus condos which skyrocketed by 53% to the end of June over the same period of 2013 – gains beyond those seen in Vancouver, Calgary or Montreal, notes the Top-Tier Real Estate Report released Tuesday.

“Despite fears of oversupply, demand for luxury condominiums remained high,” says the twice yearly state of the high-end market report by the high-end real estate company.

Comment: Yet again, for the 87th time, proving that oversupply is a myth.

Sotheby’s realtor Paul Maranger said he’s seen a surge just since this year’s brutal winter in baby boomers looking for spacious but low-maintenance luxury condos, ideally with two parking spots, which can be tougher to find.

Comment: Interesting, listings were up. I wonder if there is a correlation between sales of homes and purchases of condos. More homes for sale because more of those owners went for a condo instead… hmm…

Many of these buyers already have second homes in sun destinations or cottage country that are great draws for family get-togethers, but are looking to simplify their lives and cash out on their pricey homes.

Even the GTA’s highest priced condo apartment and townhouses, those over $4 million, saw sales double, the report notes.

Comment: Were there more for sale? We need to know if sales doubled while supply remained steady, or if listings tripled and sales only doubled. Without context, the information is meaningless.

“Given strong economic fundamentals, increased consumer confidence and mortgage lending rates that remain at historical lows, all markets are expected to gain momentum in the latter part of 2014,” says Sotheby’s.

“International demand is also expected to remain strong across Canada’s major metropolitan markets, with the removal of Canada’s Immigrant Investor Program having had no impact on the luxury real estate market year-to-date.”

Comment: I think there are 2 key items there. Current economic fundamentals are strong and international demand remains high. Regardless of what the media might have you think.

More than one third of all high-end condos in the GTA actually sold for over list price in multiple bids, although not quite the bidding-war fever pitch that has driven the City of Toronto’s particularly tight house market to stratospheric levels, pushing even basic detached homes to an average sale price approaching $1 million.

A total of almost 4,000 houses, condos, detached and semi-detached homes sold for over $1 million across the GTA in the first half of 2014, up 34% year over year, says Sotheby’s.

Comment: But prices keep rising and rising, pushing that chunk of the market higher. As the average price rises, the percentage of properties over $1 million will also rise. It does not necessarily mean more luxury homes are selling as much as it means that prices in general are rising.

While they are also up 34% in Vancouver, that compares to just a 17% uptick in high-end sales in Calgary and 11% in Montreal, according to the report.

That city was the only major urban centre in the country to actually see a significant downturn in high-end real estate sales through 2013, although sales picked up significantly in the wake of the defeat of the Parti Quebecois government April 7.

Comment: Montreal and Quebec will continue to suffer until the whole separatist thing is put to rest forever.

Since then, four $4 million-plus homes have sold in Montreal “signaling renewed confidence in this high-end luxury segment,” although luxury condo sales are still down 4% in the first half of 2014 compared to 2013.

But, $1 million also isn’t what it used to be: Some of those gains, in Toronto and Calgary in particular, can be attributed to fierce demand in the face of ongoing shortages of listings which has driven competition – and prices – for detached and semi-detached houses to stratospheric levels.

Comment: As I said above…

In fact, the GTA ranked tops for the first half of 2014 for the number of $1 million to $2 million properties that sold for over asking price – some 37%, followed by Vancouver at 30%, Calgary at 9% and Montreal at 7%.

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Contact Laurin Jeffrey for more information – 416-388-1960

Laurin Jeffrey is a Toronto real estate agent with Century 21 Regal Realty.
He did not write these articles, he just reproduces them here for people who
are interested in Toronto real estate. He does not work for any builders.
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