Homes for well-heeled buyers are getting more expensive in Toronto and Montreal, as momentum for luxury property prices continues.
Royal LePage looked at data from five major markets with varying thresholds for what constitutes luxury: Greater Toronto Area ($3,150,070), Greater Montreal Area ($1,322,808), Greater Vancouver ($4,339,553), Calgary ($1,633,178), and Ottawa ($1,515,306).
For luxury condos the thresholds were: Greater Toronto Area ($1,681,897), Greater Montreal Area ($1,046,065), Greater Vancouver ($1,875,347), Calgary ($834,169), and Ottawa ($909,014).
“Luxury condominiums in Toronto saw significant price appreciation as the region’s international reputation continues to grow,” said Kevin Somers, from Royal LePage Real Estate Services, in the report.
“Demand has remained healthy for luxury houses in Toronto and Ottawa, however, Montreal’s detached luxury home market continues to show significant upward price momentum.”
The median price for a luxury house in Montreal rose 8.5 per cent over the past 12 months and 8.3 per cent for condos.
Royal LePage says a lack of supply is pushing up prices. The imbalance is due in large part to a lack of confidence among sellers, who are reluctant to list if prices keep rising and the next home they buy is pricier than what they just sold.
“While demand for well-established luxury neighbourhoods such as Westmount and Outremont remain steady, there has been a surge of demand for luxury properties in surrounding neighbourhoods such as Le Plateau and Griffintown,” said Marie-Yvonne Paint, of Royal LePage Heritage, in the report.
“Luxury homes in the West Island remain popular, which is driven by good schools and views of the water. Both features are popular among high net worth newcomers.”
Toronto poised to take over
The median price of a luxury house in Toronto rose 1.2 per cent over the last 12 months. But, the luxury condo market echoed the broader condo market with a 7 per cent jump to $2,402,650.
“Luxury buyers face the same low inventory scenario that challenges the overall residential market,” said Steven Green, sales representative at Royal LePage Partners Realty, in the report.
“Some of the city’s most desirable pockets have a very low inventory of listings, which is unfortunate for sellers who want to move up in the same neighbourhood.”
Royal LePage expects the trend to continue over the next year — forecasting a 6 per cent increase for luxury condos, which is even loftier than what it sees for Montreal. It predicts a 2.5 per cent increase for luxury houses.
The luxury segment is projected to be flat in Calgary, down in Vancouver, and modestly higher in Ottawa.
Jessy Bains is a senior reporter at Yahoo Finance Canada. Follow him on Twitter @jessysbains.