Even luxury real estate buyers are holding off in Toronto and Vancouver, watching and waiting after recent government measures aimed at cooling off the hot housing markets, according to new figures.
New numbers from Re/Max show that between January and July this year, sales of luxury properties with a price tag of $3 million or more slipped 40 per cent in Vancouver and 14 per cent in the Greater Toronto Area, compared to a year ago.
The number of $3-million-plus properties that changed hands in Vancouver in the first seven months of the year fell to 499 from 838 in 2016, Re/Max says. In the Greater Toronto Area, the number of properties sold between January and July this fell to 738 this year from 860 a year earlier.
Christopher Alexander, Re/Max’s regional director for Ontario-Atlantic Canada region, says would-be buyers moved to the sidelines after the introduction of government measures aimed at cooling the housing market, including a foreign buyer tax.
“Sales are down, but that’s really, I think, a result of just the market fundamentals that were going on,” he said. “People waiting to see what was going to happen. But what’s very encouraging is prices haven’t really adjusted all that much.”
In April, the Ontario government introduced its 16-part Fair Housing Plan, which included a tax of 15 per cent on buyers in the Greater Golden Horseshoe area — which stretches from Niagara Region to Peterborough — who are not citizens, permanent residents or Canadian corporations. A similar tax was introduced in Vancouver last summer.
Sales of properties worth $1 million to $2 million in the Greater Toronto Area slipped 26 per cent compared to 2016, while sales of Vancouver properties with that price tag during the same period dropped 10 per cent.
Sales of slightly more expensive properties from January to July worth $2 million to $3 million also slipped in both cities, down 16 per cent in the Greater Toronto Area and 27 per cent in Vancouver.
Still, there were pockets across the country where homes at the high-end of the market continued to see demand. In the tony Ontario suburb of Oakville, the number of homes sold for $3 million or more rose 113 per cent, to 24 homes compared to 15 a year earlier.
However, a breakdown of the luxury real estate numbers in Toronto tell a different story for condos compared to single-family homes.
Sales of Greater Toronto Area condos worth $3 million or more rose 121 per cent to 31 sold in the first seven months of this year, compared to 14 a year earlier, Re/Max says. Condos at slightly lower price points of $1 million to $2 million rose 90 per cent to 544 properties sold. In the $2-million to $3-million price range, condo sales were up 47 per cent to 56 properties sold in the first seven months, compared to 38 a year ago.
Condos are seen as a relatively affordable option in the Greater Toronto Area, says Alexander, particularly for those who want to be located downtown. As well, baby boomers are downsizing their large single-family homes to smaller dwellings, such as condos, he added.
“And baby boomers did significantly well, because most of them bought 15, 20, 25 years ago, and their homes have tripled in value in that time,” Alexander said. “So they have a lot of equity they can use.”