Luxury home sales more than $3 million set a new record in Greater Toronto Area (GTA), with the number of freehold and condo properties sold in 2020 topping peak 2017 levels, according to a new report by RE/MAX of Ontario-Atlantic Canada.
More than 1,000 properties changed hands over the $3 million price point in 2020, up 55.7 per cent from 2019 (1,062 versus 682) and edging one per cent ahead of the record set in 2017 (1,062 versus 1,047). The number of homes sold over $4 million climbed 53.4 per cent year-to-date (379 versus 247), while sales over $5 million appreciated 44 per cent to 180 in the GTA, up from 125 in 2019.
“The housing bounce-back — during one of the most tumultuous periods in recent history — has been nothing short of remarkable,” said Christopher Alexander, chief strategy officer and executive vice-president, RE/MAX of Ontario-Atlantic Canada. “A combination of both economic and psychological drivers contributed to a robust upswing in demand, influencing one of the greatest pivots in the GTA’s housing market history.”
Economic stimulus played a definitive role in the uptick in homebuying activity, but the report reveals that the COVID-19 lockdown was the true catalyst. With renewed focus on personal space, and the ability to work from home, luxury buyers doubled down on larger homes and less densely populated neighbourhoods, with some choosing to relocate entirely out of the 416 to the 905 and beyond.
Freehold sales over $3 million surged outside of the 416 area code as a result, with Halton reporting a 188.8 per cent increase in sales over $3 million (130 versus 45), followed by Peel at 112 per cent (89 versus 42) and York at 85.5 per cent (180 versus 97) in 2020.
Luxury condominiums in the GTA also showed upward momentum, with a 28.8 per cent increase in year-over-year sales at $3 million plus (58 versus 45). The number of condo apartments and townhomes that have changed hands at the $3 million, $4 million and $5 million price points have all set new records.
The GTA’s luxury segment benefited from the sharp economic rebound in the third quarter and a stronger than anticipated fourth quarter of 2020. Eighty-seven per cent of job losses that occurred in the Toronto CMA earlier in the year were largely recouped by November. After plummeting in March, North American stock markets also saw strong growth in the second half of the year. Historically low interest rates also helped prop up high-end sales. The Bank of Canada, which held the overnight rate to 0.25 per cent throughout much of 2020, indicated economic recovery would continue to require “extraordinary monetary policy support” into 2023.
“The second lockdown may hamper homebuying activity to some extent in the first quarter of 2021, but the market is expected to take flight in the spring as numbers improve and the vaccine rolls out across the country,” said Alexander. He also notes that while the uber-luxe segment of the GTA market represents only a small fraction of total residential sales, the activity at the top end bodes well for the market overall in 2021.