There has been a sharp drop in sales of luxury properties in the Toronto area, but real estate agents are optimistic of improvement.
A report from RE/MAX Integra shows that sales of homes in the $3 million+ sector slumped 58% in the first two months of 2018 – just 76 transactions compared to a record of 180 in the same period of 2017.
In the $5-million-plus category, luxury sales fell 46% to 15 transactions in the GTA, compared with 28 a year ago.
The exception was condo apartments and townhomes in the city of Toronto, where sales of $3m+ homes increased from 5 in the first two months of last year, to 8 this year.
“Sales of upper-end homes year to date are more in line with 2016 volumes rather than 2017, which should be distinguished as an outlier year for luxury real estate,” says Christopher Alexander, Executive Vice President and Regional Director, RE/MAX INTEGRA Ontario-Atlantic Region. “Any comparison will fall short of 2017 levels throughout much of the spring, but demand for luxury product is likely to improve by early summer and carry through to the remainder of the year.”
Demand remains strong, the report says, with investors including foreign buyers keen to purchase high-end GTA properties.
Alexander says that the economic fundamentals throughout the Greater Golden Horseshoe are solid and he expects strong sales once market conditions stabilize, and the concern over tighter lending practices and rising mortgage rates subsides.
“Ontario offers world-class real estate at affordable prices, and as such, should see continued growth in both sales volume and values in the years ahead, especially as the province’s star rises on the international stage,” he says.
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