Toronto is expected to lead the country in sales of homes worth more than $1 million as the market in Vancouver cools off, Sotheby's International Realty Canada said Wednesday.

The firm said Vancouver sales of single-family homes in the $1 million-plus range declined by 30 per cent in July and by 65 per cent in August, compared with the same months last year. 

Sales of Vancouver luxury homes over $4 million were off by 33 per cent year-over-year in July and by 46 per cent in August.

Condominium sales dropped sharply in Vancouver during the two months. From sales of 93 units worth more than $1 million in July, sales skidded to 49 in August, while sales of condos over $4 million went from seven units in July to zero last month.

Sotheby's said the introduction of the 15 per cent foreign buyer tax by the provincial government on Aug. 2 "injected uncertainty" into the market and is expected to moderate sales activity in the fall. 

B.C. brought in the foreign buyer tax to curb property speculation. It also gave the city the power to tax empty homes, a move that Vancouver Mayor Gregor Robertson on Wednesday said could result in some homeowners soon paying as much as an extra two per cent tax on their properties.

Shifting interest

The foreign buyer tax in Vancouver could mean more interest in the luxury home market in the Greater Toronto Area, which Sotheby's said had a more active summer than anticipated.

Year-over-year sales of single-family homes worth more than $1 million in July and August were up by 83 per cent in the Greater Toronto Area and by 55 per cent in the city of Toronto.

Sales of condos in that same price range also showed a bigger summer jump, rising 89 per cent in the Greater Toronto Area and 86 per cent within the city of Toronto.

Sotheby's said the high-end market in the Greater Toronto Area is expected to keep rolling through the autumn, propelled, in part, by local demand and growing interest from foreign buyers.

"Hints of newly redirected interest from international investors following the introduction of Vancouver's foreign buyer tax have been observed by industry observers, and is expected to gain traction in the fall, particularly within the top-tier single family home market," the firm said.