Canada's Condominium Magazine
Toronto had the most active luxury real estate market in the world in 2014, according to Christie’s International Real Estate. Of the top ten luxury markets it ranked, all but Toronto slowed last year. Sales of luxury properties in Toronto, by contrast, were up 37 per cent, making it the hottest market in the world.
Calling it the hottest market is appropriate. Christie’s distinguishes between a market’s overall prices and “relative luxuriousness,” which are ranked on a Luxury Index, and the growth and demand experienced in a market, measured by a Luxury Temperature. Toronto ranked tenth on the Luxury Index, surpassed by cities like London, New York and Hong Kong. But on the Luxury Temperature, Toronto placed first.
The Temperature includes factors such as annual growth in the number of luxury properties sold and the average length of time on the market. Annual growth in Toronto was twice as high as the nearest competitor, San Francisco. The number of days it took to sell luxury properties in Toronto was just thirty-one, significantly lower than in San Francisco or any other of the top ten cities. To put that in context, the average selling time for a luxury property worldwide in 2014 was 254 days. The higher the listing price, the longer the selling period tends to be.
As for defining luxury real estate, the Christie’s report, appropriately titled “Luxury Defined: 2015”, notes that it differs from city to city. The starting price for a luxury home in Toronto is given as $3 million. This is half the price of London luxury, but the same as in Paris and San Francisco. In Los Angeles, you’d have to pay $8 million to get luxury. The worldwide benchmark is set at $1 million.
Even in the luxury segment, Toronto’s real estate market is hampered by lack of inventory. Toronto was the only city among the top ten markets in which 2014 sales were higher than the previous year. Luxury sales were up 37 per cent, the second-best year on record. According to a Chestnut Park Real Estate broker, that record would have been “shattered” if there had been more inventory.
According to Dan Conn, CEO of Christie’s International Real Estate, Toronto’s performance has a lot to do with its image for stability and security. “This is one of the most stable financial and governmental systems in the world. It’s the major economic hub in Canada, with a net influx of people and an incredible rate of growth. The perception is it’s a safe place to invest, still relatively cheap, with an attractive rate of return.”
In spite of that glowing assessment, stereotypes persist. A story about Toronto’s ranking as number one in the English paper the Daily Telegraph had the headline: “Snow storms and ice hockey: Billionaires flock to the world’s new luxury homes hotspot.”
Photo at top is of model suite at Tridel’s Sherwood at Huntington condominiums. Luxury suites are priced from $.75 to $2.8 million.