The luxury real estate market in central Toronto is currently burning red hot spring 2021, according to multiple reports from the city’s real estate insiders. Sales activity for luxury homes in the city is booming, with sales for homes worth over worth over $4 million up nearly 200% in the first half of last month, according to data released by Sotheby’s International Realty Canada.
Toronto’s luxury real estate market, in common with other major urban areas across the world, experienced remarkable growth during 2020, not in spite of, but largely because of the upheaval that the Covid-19 pandemic brought to our lives. For those homebuyers who could afford it, the priority was to find a home in a less densely populated area that offered more flexible indoor space, home office facilities, a large garden and maybe even a basement home gym and pool.
Sotheby’s International Realty Canada reports that sales of luxury homes worth over $3 million actually reached their highest level since 2017, with over 1,000 properties sold, representing a 50% increase on the previous year.
With the vaccine roll-out, life is slowly beginning to return to normalcy, but the luxury housing market is showing no signs of slowing down. For many, the increased focus on our homes and their immediate surroundings brought about by the pandemic has become permanent. People are still looking to make a move into more spacious and luxurious surroundings, particularly with the prospect of working from home, at least part-time, becoming the new normal. Money saved due to last year’s restricted lifestyles and low interest rates are combining to make the purchase of high value homes a realistic option for those who may have previously hesitated.
Sales of large detached homes are especially strong in central Toronto, with Sotheby’s International Realty Canada reporting a rise of slightly over 200% in year on year sales in January and February 2021. An increasingly number of luxury homes purchasers are willing to undertake extensive renovation work to customise homes that are in the right neighbourhood but need updating or restyling. Some of these renovated properties may well find their way onto the market to be resold at significant profit.
How long is this super-heated luxury real estate market going to last?
Fears have been expressed that the Toronto housing market as a whole may see a drop in prices if the current property market bubble bursts. However, optimism remains high for the luxury real estate market. The top end of the market is set to benefit from the government’s recently unveiled plans to boost skilled immigration over the next three years. Among the 1.2 million new arrivals, will be a significant number of high-net-worth individuals who are attracted to Canada as a stable base from which to run their businesses. Add to this the return of international investors as travel restrictions ease and the general boost in consumer confidence as the economy reopens, and it’s safe to say that the prospects for luxury real estate in Toronto are looking rosy.
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