Toronto’s luxury real estate market continued to heat up in 2019 and is showing no signs of slowing down, according to the latest report from international real estate firm Engel & Völkers Americas.
The report, which focused on homes exceeding $1 million in primary real-estate markets like Vancouver, Toronto, Montreal, and Ottawa, provided an analysis and 2020 forecast for each metropolitan market.
Overall, the luxury real estate firm forecasts Canada to have a 4% growth in resale price as a result of strong demand drivers and 2019’s housing market resilience.
“The overall residential real estate market in Canada remains strong and indicators for 2020 point toward continued growth and, in some areas, welcomed stability,” said Anthony Hitt, president and CEO, Engel & Völkers Americas.
Here in Toronto, in 2019, Engel & Völkers Americas says the real estate market proved “buoyant” and found its footing in the second part of the year to continue holding its position as a seller’s market thanks to a strong economy and healthy population growth, as well as domestic and foreign immigration.
Additionally, in the past year, the firm said home prices in Metro Toronto continued to rise while market conditions provided a negotiating advantage for sellers.
Heading into 2020, experts expect prices in Toronto to increase at a quick pace of 4 to 7%, while suburban prices are expected to rise by 3 to 5% within the Oakville market, according to the report.
The real estate firm cited Toronto’s growing consumer confidence, lowering interest rates, hot rental market, and continued interest domestically and internationally to live in the city as contributing to the city’s projected growth in 2020.
Much of Toronto’s increase in population was driven by domestic and foreign migration in 2019, with the largest international buyer segments coming to the city from China, Iran, and Russia, with a portion of this population purchasing luxury housing in affluent neighbourhoods like Yorkville, the Annex, Rosedale, and Forest Hill.
Additionally, the report revealed there is now a growing increase of interest in living on King Street from buyers looking to downsize for more one-of-a-kind listings. There are also lots of buyers and investors looking to buy outside of the city in the suburbs of Toronto like Hamilton and Barrie in search of larger lots and affordability.
Moreover, the firm said it’s now seeing more buyers seeking private financing to get around the constraints of government regulations like the mortgage stress test.
“Interest rates are coming down and buyers have become acclimated to the mortgage stress test,” said Anita Springate-Renauld, License Partner, Engel & Völkers Toronto Central.
“We are seeing more private financing to get around the constraints formal banks adhere to. As a result, things started picking up in the latter part of 2019, and we expect that to continue into 2020.”
“Home sellers are also becoming more realistic about the offers and prices they’ll receive for their properties. Because of these factors, I see the market continuing to gain traction in 2020,” said Springate-Renauld.