Luxury home sales drop in Toronto with unit sales of $4-million-plus homes sliding 34%

Five properties sold for more than $10 million compared to seven logged during the same time last year, the report said.

Homes valued at more than $1 million saw a 27 per cent decline as interest rates and economic uncertainty affected sales in the category.

Across the GTA home sales in that price range saw a drop of 29 per cent.

But Sotheby Canada president and CEO Don Kottick said that while numbers show a decline, the luxury market is better than it appears as more sales turn to private and targeted sellers rather than via MLS.

The shift has resulted in an “general but incomplete” picture of the luxury home market, according to Sotheby’s.

“It’s a very difficult thing to track,” Don Kottick, President and CEO of Sotheby’s Canada said. “Within our own organization that’s definitely a trend we’re seeing.”

Despite uncertainty in other markets caused by economy and housing supply issues, the report says, Toronto’s position as the country’s financial hub helped its luxury market.

Sellers and buyers, the report says, are seeking more confidentiality with targeted local and global marketing to find qualified buyers.

The report did not specify if homes were selling below listing price, but emphasized in some markets, such as luxury condominiums, buyers have an advantage.

Across the GTA regional condos over $4 million saw a sales increase of 24 per cent, the report said, but sales over $1 million were down 42 per cent.

Kottick said it’s been difficult for the conventional market to adjust to interest rate hikes implemented by the Bank of Canada over the last year as it tries to battle inflation.

Across Canada similar trends in sales decreases were reported.

According the report, Vancouver saw a decline of 18 per cent in sales of luxury homes worth more than $4 million with residential sales over a $1 million down 25 per cent.

Montreal also saw declines of 28 per cent for properties over $1 million while Calgary saw a 10 per cent decline for similar properties.

Most consumers likely feel the interest rates have hit their peak, Kottick said, and could start entering the housing market in the fall.

But interest rates are impacting affordability, he said, adding high levels of immigration are also putting pressure on the market.

In 2020 the federal government announced it aimed to admit more than a million immigrants into the country over the succeeding three years.

The increase was meant to strike a balance between Canada’s economic needs and its obligation to reunite families and shelter refugees in need of protection.

“Typically, when we bring in new immigrants, 60 per cent of them are in the home-buying class,” Kottick said. “Those million people are coming into a country that has a chronic shortage of housing stock relative to our population.”

High numbers of newcomers, he said, have a limited affect on the luxury market.

With Star Files