Just like any other sector in the Canadian housing market, the luxury home market is on fire. Over the first 2 months of 2021 sales of luxury homes worth $4 million or more has increased by over 150%. Among these sales, we can see five homes sold for more than $10 million. This can have many reasons but some experts believe this might be because of low inventory in lower price range homes.
Renters are the main group of people who have experienced job losses facing harder times to make ends meet and keep up with expenses like rents. On the other hand, higher-paid professionals who had the opportunity to work from home and keep their jobs now are taking advantage of lower mortgage rates to buy even bigger homes especially large detached homes.
On the other hand, sales for other price ranges have also increased about 52%. Condo sales in Toronto are on the rise and Benjamin Tal, CIBC Capital Markets deputy chief economist believes this will continue for a while. Condos are more affordable and buyers are taking advantage of low mortgage rates to buy a home while they can.
However, Canada Mortgage and Housing Corp. are warning that these prices are pretty vulnerable and might experience a sharp drop. However, due to the high interest, high-net-worth are showing to come and live in Canada due to its stable environment, Kottick of Sotheby’s believes the luxury market is going to remain strong.