See how many condos in the Greater Toronto Area sold for more than $1 million last year

It looks like we’re in for another year of strong activity in the high-end condo market. Sotheby’s International Realty Canada released its Top-Tier Real Estate Report today, predicting sellers’ market conditions in the condo market. Can’t say I’m surprised. 

At the end of last year, I wrote about how I hope more families and couples embrace high-density housing in 2019. I said this because I believe that in order to accommodate our population growth, the Greater Toronto Area needs more mid- and high-rise condos and stacked townhome communities. 

With prices still hovering around $1 million for a single-family home in the GTA, many buyers don’t really have a choice - they have to buy a smaller condo unit if they want to own. While Sotheby’s report doesn’t really pertain to first-time buyers, they do mention that ‘rightsizing’ baby boomers and families forced into the condo market are responsible for driving prices up. As soon as the home price hits $1 million or more, the property is included in the top-tier segment. 

In 2018, there were 1,259 top-tier condo sales in the GTA. This is 3% lower than 2017, but Sotheby’s says the market rebounded in the second half of the year. The majority of the sales were priced from $1 million to $2 million (1,084 sales); this is 4% lower than the previous year. 

Interestingly, condo sales between $2 million and $4 million increased 12% year-over-year with 158 total. I’m assuming this is due to the strong economy and population growth. Sotheby’s says that overall top-tier market activity (not just condos) will remain steady through the first quarter of 2019 thanks to healthy population growth, a drop in unemployment rate, and an expected GDP increase. Plus, the stress test doesn’t really have the same impact on those who can afford a $2 million+ condo, but I’ll come back to that. 

There were 17 condo sales over $4 million, which is 19% lower than 2017. Unsurprisingly, 1,129 of the 1,259 top-tier condo sales were in the City of Toronto. As of January 2, 2019, there were 289 top-tier condo listings on the MLS in the GTA (232 of them in Toronto). This equals three months of supply. If you’re thinking of selling your luxury condo, now’s the time. 

The second half of 2018 marked a rebound for the top-tier condo market. From July to December 2018, there were 601 sales, which is 12% more than the same period in 2017. During this time, 24% of all condos sold were priced over $1 million. 

At the beginning of the 2018, the new mortgage stress test kicked in - essentially smothering the flames of the GTA’s scorching market. Some buyers stepped onto the sidelines for a while, but by the summer, buyers had regained confidence in the market. It doesn’t seem like the stress test did much to moderate the top-tier condo market.  

I think it’s reasonable to say that if you are in the market for a $2 million+ condo, qualifying at a slightly higher rate probably isn’t a crippling blow to your investment plans. It’s the first-time buyers who are truly affected by the stress test, and I think with a bit more digging, Sotheby’s findings can be used as proof that the stress test needs to be reduced or repealed, even if it’s only for certain buyers, like first-timers. 

I’m very interested to see how the the top-tier condo market fares through the first half of 2019. My prediction: there will be an increase in sales compared to 2018.