GTA Luxury Real Estate Market Report 2023
GTA Luxury Real Estate Market Overview
The current heated home buying activity of regular home buying in the GTA is spilling into the luxury segments as well. Low supply has been sparking competition between buyers everywhere.
Much of this activity can be attributed to the pent-up demand, which has been building up since mid-2022. With currently stable mortgage rates and attractive housing values, buyers are eager to secure a home.
Here are some of the trends in the luxury segment of the Greater Toronto real estate market.
- Keen buyers have returned to the market, expecting bargains and selection, but not finding much choice.
- Limited inventory has placed pressure on competitive offers on well-priced homes in desirable areas of the GTA.
- Buyers are feeling frustrated with the lack of selection available, particularly in the $3 million to $5 million price range.
Pent-up demand for housing in the Greater Toronto real estate market was unleashed with the recent decision by the Bank of Canada to temporarily pause interest rates increases.
Luxury Sales Volume & Pricing
- Year to date, more than 260 homes have sold at $3 million+, which is down substantially from the 702 sales reported in the first quarter of 2022. However, it is ahead of Q4 2022 levels.
- The average price for high-end freehold and condominium properties has remained relatively stable, falling about 2.7% in Q1 2023 from the first quarter of 2022 ($4,056,809 vs. $4,165,593).
- 20% of the freehold sales over $3 million, sold at or above the list price.
- Activity started to shift into high gear in late March, with more showings and sales reported, including two sales over $8 million.
- Buyers are feeling frustrated with the lack of selection available, particularly in the $3 million to $5 million range.
Where in the demand coming from?
The foreign buyer ban has had a minor impact on the GTA thus far, given domestic buyers have dominated most of the movement in the market in recent years. Greater stability in the overall market has been noted with the Bank of Canada holding on interest rate hikes, with consumer confidence improving from last year’s levels.
As a result of the SVB bank failure, there seems to be a new wave of buyers wanting to make bigger purchases to get more of their cash into real estate. If the current trend continues in the high-end, the market will likely experience upward pressure on values once again.
“Recent stock market volatility and bank failures south of the border that have sent shockwaves throughout the financial markets may provide an additional boost for Canadian housing markets as investors turn to the security of bricks and mortar yet again”. – RE/MAX Canada
Luxury Real Estate Market around the GTA
Hamilton & Burlington
- February sales showed higher price points, with affluent buyers seeking newer, high-end homes or older homes that have been entirely rebuilt.
- Inventory levels are up compare to last year, but remain in balanced market condition.
- The uber-luxury segment priced between $4 million and $5 million, has performed relatively well as it is somewhat unaffected by the overall market challenges.
- Balanced market conditions exist at present, but rise in sales is depleting the limited supply of homes.
- New construction over the $1 million price point is faltering as the gap between resale and new home prices has increased.
- Luxury sales are expected to gain traction, but high-end buyers will likely remain cautious with the threat of further interest rate hikes.
Blog content credit: remax.ca