Influx of foreign investors from Vancouver fuel Q3 surge in luxury home sales in the GTA, says Barry Cohen Group

Sales of $2 million plus homes up 92 per cent over Q3 2015

TORONTO, Oct. 19, 2016 /CNW/ - Third-quarter sales of high-end homes priced over $2 million in the Greater Toronto Area (GTA) surged 92 per cent ahead of levels reported in Q3 2015, according to luxury realtor Barry Cohen. Seven hundred and fifty nine homes changed hands between July 1 and September 30, up from 394 sales in the previous year. 

The timing dovetails with the implementation of the 15 per cent property transfer tax on foreign entities in the Greater Vancouver Regional District effective August 2, 2016.  "Foreign investors were transitioning into the GTA within weeks of the tax introduction in Vancouver," says Cohen, a high-end specialist with RE/MAX and the company's number one sales associate in Canada.  "The impact on the market has been significant."

Year-to-date, close to 2,400 upper-end sales have taken place over the $2 million price point in the GTA, an increase of 80 per cent over the 1,312 units reported sold in 2015. This segment, representing approximately 2.6 per cent of the overall marketplace, continues to illustrate the red-hot demand for properties at the top end. Homes priced over $5 million have also experienced heated activity year-to-date, with sales up 41 per cent over last year's levels (79 vs. 56).

Sales of $2 million plus homes in the Greater Toronto Area
	2016	2015	2014
Q3	759	394	268
Q2	1,097	639	428
Q1	500	279	193
YTD Total:	2,356	1,312	889
Source:Toronto Real Estate Board "Market Watch", Barry Cohen Group

Inventory levels continue to challenge affluent purchasers in the Greater Toronto Area, especially at the $2 to $3 million price point. Less than 200 properties are currently listed for sale in Toronto proper, prompting fierce competition for high-end homes, particularly along the Yonge St. corridor. Multiple offers remain commonplace and prices continue to escalate.

Over the $5 million price point, however, listings are more plentiful. While sales are still strong at the uber-luxury level, there are some consumers that are worried that a market correction will occur in late 2017/2018.

"Government intervention is already underway at a federal level to soften the potential impact," says Cohen. "Last week's changes to mortgage qualifications primarily affecting first-time buyers ensures that borrowers can withstand future increase in mortgage rates. It's likely the first of many pre-emptive measures that will be put in place to reduce overall risk in the marketplace."

While Cohen believes that Toronto is unlikely to follow Vancouver's lead, there are fears that the provincial government will levy a transfer tax of some sort on foreign entities in the near future.  Conversely, the Chinese government may move to limit investment. "Either scenario would have far reaching implications for the Canadian housing market."

In the interim, demand for upper-end properties continues unabated in the Greater Toronto Area, setting the stage for yet another record year of home-buying activity in 2016.

About Barry Cohen

Barry Cohen has been the top agent in the city for luxury home sales at every price point over $2 million from 2010 to 2015 combined, according to statistics compiled from the Toronto Real Estate Board. He has ranked as RE/MAX' #1 sales associate in Canada several times, earned global recognition by placing #2 worldwide twice for RE/MAX LLC, and is the recipient of numerous RE/MAX Awards, including their highest honour, the Luminary of Distinction.  There are currently only 33 members worldwide, out of approximately 100,000 active agents.  

SOURCE Barry Cohen Group

Barry Cohen, Realtor, RE/MAX Realtron, Office: 416.223.1818, [email protected], www.barrycohenhomes.com; Eva Blay-Silverberg, Point Blank Communications, Office: 416.781.3911 Cell: 416.505.0627, [email protected] or [email protected]