Greater Toronto Area home sales may have hit a slump but a new report suggests Toronto's luxury condominiums are being gobbled up faster than ever by wealthy buyers willing to shell out over $1 million for apartments in the sky.
'A million dollars is almost entry level in this city.' - Adam Parsons, Bosley Real Estate Ltd.
Brad Henderson, president and CEO at Sotheby's International Realty, says there are different subsets of buyers responsible for the 98 per cent spike in luxury condo sales.
"People are looking for an alternative to single family homes," Henderson said.
He calls them "right sizers": people who are "moving from very large format homes to a smaller environment where they don't have as much maintenance."
Henderson says the people who are part of this trend are not only first-time buyers interested in centrally-located apartments with a view but also baby boomers with lots of equity who are looking to downsize.
The data also indicates an even bigger boom amongst even bigger spenders.
According to Sotheby's Top-Tier Real Estate Report, sales of properties listed for over $4 million went up 150 per cent in the GTA compared to this time last year.
"The buyers and sellers of those properties are less concerned about macro-economic policies because housing represents a small amount of their disposable income," Henderson said.
Adam Parsons, a broker with Bosley Real Estate Ltd., represents properties in some of Toronto's wealthiest neighbourhoods. He says these buyers are unaffected by any lull in the current market.
"A million dollars is almost entry level in this city," he said. "I work the luxury market and for me, it's over $3 million."
His recent sales back up Sotheby's data suggesting condos are the new mansions for the rich and he doesn't think that's going to change anytime soon.
"People within that bracket are still buying. They don't make decisions based on what the government has done," he said, referring to Premier Kathleen Wynne's housing plan proposed back in April to curb skyrocketing housing prices and cool off the GTA's red-hot real estate market.
"Their decisions are based on their timing and what they're doing with their lifestyle," said Parsons.
Both he and Henderson agree that for that reason, the luxury market won't be rattled by government intervention or even with the interest rate hike expected from the Bank of Canada this week.
King of the castle: Toronto trumps other cities for luxury listings
The report ranks Toronto as the leader of Canada's luxury real estate market but also highlights fluctuations in Vancouver, Calgary and Montreal.
For instance, Calgary is seeing a spike in "top-tier" sales fueled by the detached, single-family home market.
Montreal's million dollar condo sales saw a 51 per cent uptick over last year.
And even though condo views in this city might not offer the same breathtaking mountain or ocean views as the wealthy enjoy in Vancouver, Toronto has the lock on luxury.
"It's because the money is here," said Parsons.
As condo sales surge, so is the market for Toronto's detached homes. Sotheby's data shows that during the first half of the year, sales are up 111 per cent over last year and 80 per cent of those homes sold over asking.