Luxury home sales hit record high in Toronto in May

The sale of luxury homes appears to be on the rise. In Toronto, the numbers are some of the best the city has ever seen. The recovery being observed in the stock market has the rich feeling like they can afford to buy again.

CTV News Channel: Peter Kinch, mortgage expert, on signs of the times

Mortgage rates are on the rise and May was one of the strongest months in recent memory for luxury home sales in Toronto.

CTV News Channel: BNN's Marty Cej on the markets

Investors do not appear to be buying into the PM or BoC governor statements on economic recovery, meanwhile luxury home sales in Toronto were the strongest ever in May.

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ctvtoronto.ca

Date: Friday Jun. 12, 2009 5:30 PM ET

A new report on the Toronto real estate market suggests it is once again moving at full steam, with high-end homes selling at record rates.

May was the strongest month ever for sales of luxury homes in the Greater Toronto Area, according to RE/MAX Ontario-Atlantic Canada.

In that month, 273 homes were sold for more than $1 million each, compared to 258 sold in the same month one year earlier -- a difference of 6 per cent.

"What we are seeing is confidence is returning to the marketplace, and there are some market dynamics that are in place with consumers returning to this level of the marketplace," said Christine Martysiewicz, of RE/MAX Ontario-Atlantic.

"There is a shortage of inventory and there is pent-up demand, so that is all a sign of the current market conditions out there."

The previous record for luxury home sales in the GTA was set in May 2007, when 266 homes were sold for over $1 million.

The new record marks the highest number of luxury home sales in the history of the Toronto Real Estate Board.

One of the homes sold last month was located on the city's prestigious Bridle Path and was priced at over $13 million. It was the first sale of a home for over $10 million in more than a year, in the GTA.

Martysiewicz said the sales record is just one indicator that the housing market is bouncing back and consumer confidence is returning at all price points.

Contributing factors, she said, are recent gains in the stock market, the rising Canadian dollar, the rising price of crude oil and an overall increase in economic stability.

"And it's spring and we're in a very good spring market. People are buying and selling homes. April, May and June have been phenomenal and sales are up across the board," Martysiewicz said.

The RE/MAX report said the demand for homes priced at more tham $1 million has been on the rise since January -- a trend that is indicative of what's happening in the broader housing market.

In total in the GTA roughly 700 homes have been sold so far this year, compared to 944 in the same period in 2008.

However, with sales now increasing, Martysiewicz said the agency predicts total sales in 2009 will meet or exceed those of 2008.

Comments are now closed for this story

Dave in Toronto
said

Toronto has more million $$ homes than before. And let's not forget, money's cheap right now.

Raj
said

I thought we were in a recession.I am pleased for them, it's good news.On a another note, well done Harper and team!LOL

JF
said

To me this is evidence that the real victims of this recession, as usual, were the middle and working class. The wealthy have already in place buffers against taking the financial hits...its called off loading the losses to the middle and working class workers, duh! This is how unregulated capitalism works.
So, of course, they can still afford luxury homes!

JFJ
said

Are the homes being discounted though?

That's not clear from the article.

Charlie
said

hardly a trustworthy source - realtors need to drum up business somehow and announcing these stats will only help do that. Remember: stats can make anything look good if you shake them around enough!

Scene
said

Could it be that maybe a lot of these people are taking advantage of a low interest rate and the fact the province of Ontario is moving forward with the HST. People might find it better to buy now instead of next year. If it's true, it's decent news, when the rich start to spend it usually starts to filter to the middle class as well. I hate to say it, but if you have the money and you can take advantage of the times then do it. I know if I had the money to do that I would.

RD
said

Just goes to show, the rich get richer even in tough economic times!!!!

M
said

Economic crisis? What economic crisis?
Now we really know where all the money is in this country! I guess closing a bunch of manufacturing plants must be lucrative for SOME ONE.

Sherry
said

They had some re-sale homes today in the Globe and Mail in Toronto. The prices were in the 500K to 900K range and the selling price was above asking. Now, there is no way in heck that these houses are worth what they sold for. They gave the older prices like 2001 and the price was less than half of what they were asking for. There is no way at all that the house price should go up that high and fast. Folks, we are doing it all over again, house prices are over-inflated and are not worth what they are being bought for. It's insane.

Edmonton Jim
said

The rich are getting richer...some are getting bonuses with their executive compensation while others get nothing.

david sawkiw[saskatchewan farmer]
said

I agree totally with JF,, the rich in canada are never hurt by the 'economy' they know well in advance what to do and when to do it!

On the other side of the scale the poor are not damaged.

The middle class, taxpaying working stiff THATS who takes the hit.

Trent
said

So of over 5 million people, 273 bought a house over 1 million dollars.

Why is such a big deal? 0.00546% of the GTA population was able to afford an "expensive" house.

In Vancouver, 1 million dollar homes are a dime a dozen. It doesn't take rich people to own these homes, it just takes hard work and sacrifice.

peter in BC
said

Raj: how do home sales have anything to do with Harper? His "economic stimulus package" has little effect on home buying. I think your praise is very misplaced and you need to open your eyes a bit to see the whole picture.

I think the surge is and will be present until the HST gets introduced (bad idea Ontario) which should hurt home sales (and pretty much any sales) across the province. To cite an economic turn around as the cause for high end home sales to be up is a pipe dream. Good luck in seeing a swing around in the other markets for a while yet. You aren't out of the woods, just take a look at the volume of listings just east of Toronto. In closing, I would agree with Charlie on this one. Read into it only what you want, nothing more.

Jay-TO
said

The rich can buy expensive homes. You can thank Harper for the the tax cuts to the rich. They can also get free cash from the government to renovate! Obviously these credits are fir the rich, the rest of us are in a recession. I guess all those homes with "blue signs" in the Bridlepath got what they wanted.

Rich get Richer...
said

That's right people. The rich get richer.....because odds are they work harder than you!

Oh cry for me, I work my 40 hours a week and am hurt when other people have a better life than me....

If you want a million dollar house, quit complaining about other people, get off your a$$ and work for it. If you can't do it in Canada, you can't do it anywhere.

Andre
said

I think what is happening is exactly the opposite of what the article says. I know 2 people whose houses were in the $1.5M range and who now know that they couldn't sell for more than $1.1M so they are selling before the price goes down even further. People who thought they had accumulated tons of equity in their home are getting out while there is still time.

The people buying these homes are people who never thought they'd be able to get into these areas when the prices were super inflated. They are jumping on this opportunity.

I don't believe for one second that this is the sign of a market turnaround.

Nicole
said

I agree with RD...The rich get richer....I'd like to see an article on how many have LOST thier homes or got laid off in May. I hear about layoffs Daily in my line of work, and it is a sad sad situation.

Darren Hiebert
said

Yup...the rich are definately getting richer!

MAL
said

The recession never really hit the super rich and a 10% drop on a 5 million dollar house is a lot of money. Good time to buy them if you have the liquidity.

blah
said

The smart ones are selling their luxury homes now before deflation sets in. The dumb ones are buying them up at record prices. Cheap money is fueling a housing bubble which we will all end up paying for in the end.

SBlade in London
said

I have to say I agree with Rich get Richer.

The people who can buy these homes clearly have done something right in order to have the sort of finances that they do have and should be able to buy whatever material things they want.

As for the working & middle class being laid off - it's a fact of life. Stop complaining about how bad your life is, dust yourself off, and find a new job!

If people are losing their homes etc etc, maybe they were living beyond their means and were too concerned with material things.

I was laid off, yet I still have a place to live, and can pay my bills and what not. Might be the best thing that's happened to me.

Good for those people who can buy homes!

Steve
said

I don't trust real estate companies. Would you trust a car salesman?

They are just trying to up the market. I don't trust them and never will. This is all data from them.

Mike
said

WE are in recession, those people just having fun.