Demand for single-family homes is dominating the high-end housing market
Don Kottick, chief executive of Sotheby’s, said single-family homes are in particularly high demand, but they are not being built in major markets such as Toronto or Vancouver. This means fewer properties are coming on the market.
“I think the savvy buyers are realizing that there could be opportunities in this particular time … we’re going to see an uptick in activity,” he said.
Residential home sales of more than $4 million in the Greater Toronto Area (GTA) increased three per cent year over year in July and August, while sales in September were up nine per cent compared to last year, Sotheby’s said. There was a four per cent annual increase in luxury, single-family home sales, but $4-million luxury condo sales decreased by 25 per cent compared to last summer, while those priced at $1 million fell 30 per cent.
However, the Toronto has an excess of property listings this season, which should favour buyers and investors, Sotheby’s said, predicting price declines in the luxury condominium market and favourable opportunities for investment-minded buyers.
Sellers in the GTA priced properties realistically in the third quarter and made necessary concessions, which helped improve negotiations and the volume of successful transactions.
Residential properties priced at more than $4 million rose 18 per cent year over year to 45 properties sold between July 1 and August 31.
In Vancouver, 86 per cent of total sales were single-family homes, down from 89 per cent last year. Sales in September declined 52 per cent year over year, and there were no condominium sales of more than $4 million.
“In the last, probably, five years, the federal government has brought in millions of new permanent residents,” he said. “When those people come in, there’s a certain percentage that are going to buy, as most people are probably going to rent. But when they start looking in the market, then that puts more pressure on the market.”
Kottick said another component affecting sales is interprovincial migration, specifically buyers wanting to relocate to Alberta due to the economic optimism there.
“It’s an economically charged area at this point in time,” he said. “There are all these different kinds of influences that impact the market, lots of inputs and outputs. It all drives supply and demand and where people want to live.”