Both the market and the city were frozen over the harsh winter. With spring upon us, lower interest rates, and growth in capital markets, buyers are feeling confident once again.
Here is what Sotheby’s International Realty Canada has to say:
“Toronto’s top-tier real estate market has gained consistent and steady traction in the early months of 2019, and is primed for healthy spring performance. The ceiling for sales activity will be determined by inventory, as consumer demand continues to rise,” says Brad Henderson, President & CEO of Sotheby’s International Realty Canada.
Population growth and revitalized consumer confidence in Canada’s largest real estate market is expected to drive Canadian top-tier real estate performance in spring 2019. New data compiled by Sotheby’s International Realty Canada reveal that Greater Toronto Area top-tier sales have stabilized from previous years’ unpredictability, with sales over $1 million down a nominal 2% year-over-year in the first two months of 2019.
A shortfall in inventory over $4 million has resulted in a 38% decrease in MLS® sales compared to the first two months of 2018; however, demand for luxury housing remains robust leading into spring.
Positive population growth remains a defining influence on top-tier and conventional real estate demand in Canada’s largest metropolitan areas. According to Statistics Canada, annual population gains in Toronto, Vancouver, and Calgary, outstripped the national average of 1.4%, rising 2.5%, and 2.1%, respectively in late 2018, while Montreal experienced a 1.3% year-over-year lift. With immigrants and permanent residents contributing most significantly to population growth, the country’s leading gateway cities for new Canadians, Toronto, Montreal and Vancouver, will continue to see inflows that will bolster the need for housing.
Following multiple rate hikes since 2017, the slowdown of the global and Canadian economies prompted the Bank of Canada to hold its target overnight rate at 1.75% in March, evoking speculation that interest rates may stabilize or roll back in 2019.
While recent rate increases have had a negligible effect on ultra-luxury real estate consumers, steady or lowered costs of borrowing would soften the impact of rising housing costs and stricter lending guidelines for purchasers in the market for conventional and top-tier homes under $2 million, facilitating activity in the market.
With Ontario’s strong job gains compared to other provinces, as well as overall economic growth, the top-tier market is expected to remain sound through the spring.
If you’re looking to buy or sell your home this spring, we’d love to hear from you!