The weak loonie and foreign interest puts luxury resale homes and condos in high demand
In Toronto’s affluent property market, luxury is more than square footage; it is a lifestyle of opulence meticulously crafted within exclusive neighbourhoods, modern architectural estates and Victorian heritage properties. So it comes as little surprise the GTA remains one of Canada’s strongest resale markets for upscale, detached, single-family homes and luxury condominiums.
Sotheby’s International Realty Canada’s bi-annual Top-Tier Real Estate Report revealed a 71 per cent increase in luxury real estate sales valued over $4 million year-over-year. Released this January, the report also indicated a 24 per cent increase in sales of luxury condominiums over $1 million. Data from The Red Pin also revealed an increase in Toronto condos by 5 per cent between 2014 and 2015.
What defines a luxury home in 2016? According to Re/Max sales representative Suzana Davies, established upscale residential locales like Forest Hill South, Rosedale, The Bridle Path, Lawrence Park, Playter Estates, Baby Point and High Park continue to attract elite clientele and investors in search of detached homes; while Yorkville, Bay Street, Bloor Street and Avenue Road dominate the luxury condo market.
However, a lack of a prime postal code is no longer a deal breaker thanks in part to low inventory and high demand. Purchasers are focusing on their unique lifestyle needs. Ms. Davies explains, “Buyers are also looking for privacy, ravine settings, waterfront views, four-car parking including storage for luxury automobiles, temperature-controlled wine cellars and space to display art collections.”
This upward trend continues to dominate the luxury real estate market with clients paying top dollar for above-average lots on cul-de-sacs with close proximity to private schools, shopping, restaurants, easy access to subways and downtown Toronto, while multi-million dollar condominiums continue to attract exclusive clientele seeking “privacy, architectural quality and urban conveniences like museums, shops and restaurants,” explains Ms. Davies.
Resale homes are preferred because they can be occupied almost immediately, says Ms. Davies, especially among international investors looking to relocate their family. Whereas new builds can take a year or more to finish and be up to move-in condition standards, resale homes are a convenient option.
With low inventory in prime areas, attention is turning towards newer up-and-coming neighbourhoods like Edenbridge, Kingsway (formerly Etobicoke), Playter Estates, Hogg’s Hollow and Fallingbrook in The Beach.
Families with three-to-four children are leaning towards generous interior living spaces, making homes more than 7,000 sq. ft desirable. “Taste and function,” says Ms. Davies, “To reflect their personal style.” Think industrial-size kitchens, sophisticated media and game rooms, wireless home automation, flat screens in every room, temperature-controlled wine cellars, heated floors and outdoor kitchens and pools.
Luxury condo buyers are just as selective looking for units in excess of 3,500 sq. ft at Bloor West Village, Yorkville and the adjacent Avenue and Davenport area. Unobstructed views, large floor-to-ceiling windows requiring remote-operated motorized blinds, marble spa-inspired bathrooms, private aquarium-style infinity pools and streamlined contemporary kitchens outfitted with high-end appliances, cabinetry and countertops are internal feature must-haves. Ms. Davies says the demand for easy access to museums, subways and shopping is coupled with a desire for private in-house restaurants, 24-hour concierge, private elevator to suite, valet parking and laundry and cleaning services.
With high-end luxury comes a demand for aesthetic cohesion. “Any luxury buyer of this calibre will have their space professionally decorated by an interior designer for taste and function,” explains Ms. Davies. Buyers are looking to create individual, functional, and lavishly appointed living areas.
So who is scooping up these luxury accommodations? Apart from those who have done well with previous home sales, local entrepreneurs, business executives and professionals already living in Toronto; Ms. Davies sees a wave of wealth coming from mainland China, Europe, South Asia and Middle Eastern countries like Iran. “Foreign investors from unstable economies see Canada as a safe haven for their money,” explains Ms. Davies, “Growth in investment has been huge.”
Canada’s weak loonie has also afforded Americans an opportunity to purchase a “trophy home” considerably more affordable and reasonable than New York or London. The current dollar value is has two immediate consequences, explains Ms. Davies. “One, investors from around the world can buy Canadian real estate at 30 per cent off. Real estate sales in the U.S. are slowing down as foreign investors are not buying due to the strong US dollar. Two, American companies are now buying Canadian, whether it’s products, goods, real estate or holidays because it is 30 per cent cheaper than their dollar.”
The trend shows no sign of slowing. Sotheby’s report confirms that Toronto will continue to see an upward trend in luxury real estate thanks in part to low interest rates, consumer confidence, international investors and below-national average employment levels.
“All in all, a strong real estate market with increased demand, low interest rates and people who can afford the mortgage payments is a sure-fire recipe for increasing prices,” concludes Ms. Davies.
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