Toronto’s Luxury Home Sales See a 58% Surge
The luxury housing market in Toronto experienced a significant boost in the last quarter of 2024, with sales of homes priced over $3 million increasing by more than 40% compared to the same period in 2023.
More than 360 freehold homes and condos were sold in Q4, a notable rise from 259 sales in the same timeframe the previous year. Recent interest rate cuts by the Bank of Canada helped stimulate demand, sparking interest in high-end properties both within the city and its surrounding suburbs.
Experts had anticipated a surge in luxury home sales, as a combination of economic factors—such as lower rates, pent-up demand, and shifting buyer sentiment—came together in the final quarter.
Record-Setting Sales in Toronto’s Luxury Market
Toronto accounted for more than half (53%) of these luxury home sales, with the city’s softened property values creating new opportunities in the $5 million to $7.5 million range. Homes priced above $5 million saw the most significant increase, with sales jumping nearly 59% year-over-year. The $7.5 million-plus segment also posted gains, with sales rising 41%, while properties priced over $10 million remained stable compared to the previous year.
Notably, nearly half of the sales in the $5 million-plus category occurred in the suburbs, highlighting a growing preference for high-end homes outside the city core.
What’s Driving the Growth?
Several key factors have contributed to this surge in the luxury market:
- Lower interest rates: The Bank of Canada’s 100-basis-point rate cut in 2024 helped fuel buyer enthusiasm.
- Stock market gains: Strong performances in major indexes like the NASDAQ, S&P 500, and TSX have bolstered confidence among high-net-worth buyers.
- Easing inflation: As inflation pressures eased, many affluent buyers felt more secure in converting their financial gains into real estate investments.
Looking Ahead to 2025
Although inventory remains tight, there’s growing optimism for continued growth in Toronto’s luxury market. Increased buyer confidence, coupled with a strong equity market, suggests that demand will remain high, particularly for single-family homes. Additionally, the ongoing transfer of wealth across generations and rising interest from international buyers—especially affluent Chinese immigrants—are expected to continue supporting the high-end real estate sector.
The evolving political landscape in both Canada and the U.S. could also have an impact on the market. Despite this, many remain optimistic, believing that with the strong fundamentals in place, Toronto’s luxury market is positioned not only to maintain but to surpass the impressive levels seen in 2024.
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