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.
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.
Many factors contribute to red-hot growth
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.