According to a new report released by Christie’s International Real Estate and Canadian affiliate Chestnut Park Real Estate of Toronto, Toronto is the world’s second-hottest market for luxury real estate, following Auckland, New Zealand. Victoria, B.C. came in third place.
In 2015, Auckland had a 64 per cent sales growth year-over-year in the luxury category. In Toronto, where absolute size is much larger, the luxury real estate market grew by 48 per cent, while Victoria posted the third-largest sales increase out of the 100 markets that were surveyed around the world.
Although the definition of luxury real estate varies by market, in Toronto during 2015, it was defined as properties worth US$3 million and above, although the average worldwide is for properties worth US$2.2 million and more.
“Toronto’s turbocharged luxury market continues to be a function of fairly short supply and steadily increasing demand,” said Chris Kapches, CEO of Chestnut Park Real Estate, in a press release. “Just as we’re seeing in all other segments of the market, the number of available luxury properties is being outpaced by the numbers of buyers anxious to snap them up.”
Luxury homes sell faster in Toronto than everywhere else in the world, with Toronto luxury homes selling in an average of 28 days, which is significantly faster than the global average of 195 days.
According to the Christie’s report, skyrocketing home prices and record-breaking luxury sales volumes decreased slightly in 2015 and early 2016 due in part to volatile stock markets and related geo-political uncertainty causing international luxury real estate market growth rates to begin to slow, despite 2015 starting out strong. Despite that, Canada’s luxury real estate market remains attractive to prospective buyers.
“Strong governmental, banking and investment systems, favourable migration trends, leading educational institutions and stable employment have all caused our market to defy the decline that other marketplaces are experiencing in terms of sales volume and average price,” added Kapches.
In Canada, rising home prices in key cities such as Toronto and Vancouver have caused ripple effects in secondary markets including Collingwood and Hamilton, where, according to Kapches, buyers are purchasing homes for a third of the price of nearby Toronto and starting businesses in retail space that is cheaper, as well.
The entire list of the world’s hottest luxury markets, based on year-over-year sales growth between 2014 and 2015, is below:
- Auckland, New Zealand
- Toronto, Ontario
- Victoria, British Columbia
- Valencia, Spain
- San Francisco, California
- Jackson Hole, Wyoming
- Costa Smeralda, Sardinia
- Portland, Oregon
- Sydney, Australia
- Stockholm, Sweden