GTA Sees Largest Increase in Home Sales Over $1 Million

Recently, Sotheby’s International Realty Canada released their bi-annual Top-Tier Real Estate Report, announcing that the Greater Toronto Area (GTA) lead the country with a 38% year-over-year sales volume increase for homes priced over $1 million.

The Top-Tier Real Estate Report examines Canada’s largest residential markets with regards to properties sold for over $1 million in 2014. Sotheby’s collects data on sales volume, days on the market, and percentage sold over asking price.

The four urban centres with the greatest sales volume increases are Calgary, the GTA, Montreal, and Vancouver. Vancouver saw the second highest year-over-year increase with a 25% jump, while Montreal and Calgary saw more modest increases, rising 21% and 16%, respectively.

"2014 was another benchmark year for high-end real estate in Canada, as demand continued to be fueled by historically low lending rates, a strong economy and steady immigration and migration into Canada's major cities,” says Sotheby's International Realty Canada President and CEO, Ross McCredie. “We expect the market to remain strong in the GTA and Vancouver well into 2015, and for demand to outweigh available inventory, especially when it comes to detached single family homes. The outlook for Montreal and Calgary is positive, but more conservative- both cities are heading into the year positioned to maintain balance."

According to the report, a strong demand for luxury housing and a restricted inventory is what drove the prices up in the GTA in 2014. These factors lowered the average days a home priced over $1 million spent on the market, and many homes ended up selling for above asking price. The meaning of “luxury homes” doesn’t necessarily have the same meaning in the GTA anymore. Resale homes in neighbourhoods that were once considered modest are now fetching close to a million if not higher because of bidding wars.

Via sothebysrealty.ca

Last year, a total of 7,527 homes sold for over $1 million in the GTA. The sales volume for detached homes increased 37% compared to 2013, and for the home type, it was the largest increase out of Canada’s four largest urban centres. Condos saw an even larger increase, jumping 46%, also the highest out of the largest urban centres. Attached homes saw an increase of 39% thanks to a number of buyers who sought out an alternative to the expensive detached market.

Affordability has been a hot topic in recent years in the GTA. One way to avoid bidding wars is to buy a new construction home, but even in the new home market, with rising development charges and a lack of available land, average prices are on the rise. Late last year, the average price for a new low-rise home in the GTA broke $700,000 for the first time ever, and the average is expected to continue rising throughout the year.

It will be interesting to see how the City of Toronto and the rest of the GTA respond to the rising prices. And it will be even more interesting to see how homebuyers react.

Stay tuned to the Newinhomes.com Blog, we’re always keeping a close eye on the evolving new home market.

Feature image via sothebysrealty.ca