Luxury home sales in two of Canada’s most expensive markets are down from a year, as the high-end real estate market feels the effect of foreign buyers taxes.
In an annual report, realty brokerage Re/Max says sales of single-detached homes priced from $1 million to $2 million fell 35 per cent from a year ago in both Toronto and Vancouver.
Single-detached homes in the $2-million-to-$3-million range were down 50 per cent in Toronto and 22 per cent in Vancouver.
Homes that were sold for more than $3 million dropped 44 per cent in Toronto and 45 per cent in Vancouver.
Ontario and B.C. have introduced foreign buyers taxes, while B.C. has also increased property transfer taxes and school taxes on homes over $3 million.
Although luxury home sales are weakening, sales in the low-end of the luxury condo market in the cities saw increases driven mainly by millennials who are using their inheritances and baby boomers looking to downsize, the report said.
Condo sales in the $1-million-to-$2-million range were up two per cent year over year in Toronto and six per cent in Vancouver. Calgary saw their condo sales in this price range jump by three per cent, while Victoria sales climbed 19 per cent.
The most expensive condominium sold in Toronto in 2018 so far was priced at $11.5 million, topping the $8 million that was paid for the most expensive condo sold in 2017. The priciest condo sold in Vancouver so far this year was $11.7 million, up 34 per cent from the top price of $8.7 million paid last year.
Elton Ash, executive vice-president of RE/MAX of Western Canada, said the tax on foreign buyers has impacted overseas activity, opening more opportunities for local buyers to enter the luxury market.
“As a result, local buyers are driving demand for luxury condos going into 2019, which is welcome news for developers in major city centres looking to build more properties,” Ash said.