Sotheby's International Realty Canada says Toronto is poised to lead the country in high-end home sales for the third consecutive year.
The latest report from the realtor showed sales of homes worth $1 million or more in the Greater Toronto Area rose 77 per cent last year compared to 2015, with a total of 19,692 properties sold.
Sales of the priciest homes — those worth over $4 million — in the GTA rose 95 per cent year-over-year.
- Real estate up, down or flat? 5 factors that could affect home prices in 2017: Don Pittis
- Soaring house prices prompt would-be buyers to rethink their dreams
Meanwhile, high-end home sales in Vancouver started off strong but slowed in the second half of the year as a number of government policy changes took effect.
Among those changes is a one-per-cent tax on vacant homes implemented by the City of Vancouver and the B.C. government's 15 per cent tax on foreigners buying homes in Metro Vancouver.
Those changes amplified a cooling in the Vancouver real estate market that started over the summer, according to Sotheby's.
Sales in Vancouver's $1 million-plus market were down 34 per cent year-over-year in the second half of the year compared to the same period in 2015.
But on an annual basis, sales of Vancouver homes worth $1 million or more were relatively flat last year, down one per cent year-over-year to 4,515 units.
Sales of homes priced at over $4 million were up 36 per cent year-over-year in Vancouver.
Sotheby's predicts that the Vancouver market for $1-million-plus homes will remain stable in the first quarter of 2017.
In Montreal, high-end home sales increased 23 per cent year-over-year to 613 properties, thanks to a stable provincial economy and political landscape, according to Sotheby's.
Calgary's $1-million-plus market also saw a boost last year. After declining 40 per cent year-over-year in 2015 due to the oil price shock, sales of homes worth $1 million or more were up 19 per cent to 612 units in 2016.
But the realtor says it's expecting a buyers' market in Calgary in the first quarter of the year as the city's economic challenges drag on.
Confluence of factors
Brad Henderson, president and CEO of Sotheby's International Realty Canada, said there are a confluence of factors responsible for the red-hot growth in Toronto's top-tier real estate market.
Among them are low interest rates, strong employment and consumer confidence and a limited supply of properties for sale, particularly in the single-family home segment.
"With natural boundaries like the lake and the greenbelt, the Greater Toronto region has less developable land than other markets, and as a consequence there are less opportunities to add to the supply," Henderson said.
Sotheby's says global turmoil — including Britain's vote to exit the European Union and Donald Trump's election win in the U.S. — injected uncertainty into global real estate markets last year.
Canada, which is regarded as a safe haven, has a low dollar and a strong real estate market, making it a desirable destination for real estate investment and immigration, according to the report.