Uber-Luxe Toronto Real Estate Homebuying Activity in 2020
The greater Toronto real estate market is seeing record home buying activity in 2020, with sales exceeding $ 3 million
Condominium sales rose nearly 56% from 2019
$ 3 million luxury home sales set a new record amid a pandemic in the Greater Toronto real estate market. According to a report released by RE / MAX today, the number of condominiums sold in 2020 was above the 2017 peak of Ontario-Atlantic Canada.
More than 1,000 properties changed hands in 2020 for a price of 3 million US dollars. Increase of 55.7 percent compared to 2019 (1,062 compared to 682) and one percent ahead of the 2017 record (1,062 versus 1,047). The number of homes sold over $ 4 million rose 53.4 percent since the beginning of the year (379 versus 247)Revenue grew more than $ 5 million 44 percent to 180 in the GTA, up from 125 in 2019.
Uber Luxe activity in the Greater Toronto real estate market
“The real estate boom – 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 of RE / MAX in Ontario-Atlantic Canada. “A combination of economic and psychological factors contributed to a sharp surge in demand and shaped one of the greatest hubs in the history of the greater Toronto real estate market.”
Luxury home sales rise outside of 416
Economic stimulus played a key role in spurring home buying activity, but Ontario-Atlantic Canada’s RE / MAX found that the COVID-19 lockdown was the real catalyst. With a renewed focus on personal space and the ability to work from home, luxury shoppers doubled in size in larger homes and less populated neighborhoods, with some choosing to move entirely from the 416 to the 905 and beyond.
As a result, Freehold’s revenue grew over $ 3 million outside of the 416 area code Halton saw sales jump 188.8 percent to over $ 3 million (130 versus 45), followed by Peel at 112 percent (89 versus 42) and York at 85.5 percent (180 versus 97) in 2020.
“The same pattern played out in major urban centers in the United States such as New York City and San Francisco, where the pandemic tipped the scales towards a more suburban lifestyle,” says Alexander. “While demand remains strong in the 416, where luxury property sales account for 59 percent of total revenue, performance in suburbs, especially in the north and west of the city, is particularly noteworthy. Sales in 905 supported total luxury sales in 2020 and resulted in a record year for the luxury segment of the greater Toronto real estate market. “
Luxury condominium sales are bucking the downward trend
Lands weren’t alone in their upward momentum. RE / MAX, of Ontario-Atlantic, Canada found that luxury condominiums in the GTA contradicted the overall downward trend in condominium sales in 2020, recording a Revenue up 28.8 percent year over year to $ 3 million plus (58 versus 45). In fact, the number of condos and townhouses that have changed hands at $ 3M, $ 4M, and $ 5M prices has broken records.
“In 2020, domestic buyers were on full steam in the GTA real estate market to offset a decline in international home buying,” explains Alexander. “With that segment largely absent for much of the year, the overall strength of the market in what was essentially nine months of activity was pretty incredible.”
Economic Impact on the Uber Luxe Housing Market
Economically, GTA’s luxury segment benefited from the strong economic rebound in the third quarter and a stronger than expected fourth quarter of 2020. 87 percent of the job losses in the Toronto CMA earlier in the year were largely made up by November. After the slump in March, the North American stock markets also recorded 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 kept the overnight rate at 0.25 percent for much of 2020, said the economic recovery would continue to require “extraordinary monetary support” through 2023.
“The administration of the first COVID-19 vaccine in mid-December will hopefully mark the beginning of the end of the pandemic,” says Alexander, “and create the conditions for a return to normalcy in our daily lives. It won’t happen overnight. The second lockdown could hamper home buying activity to some extent in the first quarter of 2021, but the market is expected to flee in the spring as the numbers improve and the vaccine launches nationwide. “
Immigration weighs heavily on real estate in Greater Toronto
As borders reopen around the world, immigration will weigh heavily on local housing markets as the federal government turns its attention to economic growth. Just over 400,000 immigrants are expected in 2021, with nearly half expected to be Ontario residents. Economic fundamentals are also expected to improve significantly in 2021. GDP growth in the province is expected to increase by 4.5 percent.
Alexander notes that the over-luxury segment of the GTA market is only a small fraction of total home sales, but activity at the higher end bodes well for the overall market in 2021.