Canada: Luxury home sales slump in Toronto, Vancouver

Royal LePage has found the sale of luxury homes, or those with a sale price at least 3x more than the market average, has dropped by more than 1/3rd in Vancouver, and almost 2/3rds in Toronto when compared to Q1 2017.

The recent expansion of stress tests to cover all borrowers is being blamed, with LePage stating there is a “market turmoil” and that “buyers moved to the sidelines in order to gauge the impact.”

However, this isn’t the only factor depressing the market, with Ontario’s 2017 increase in the foreign buyers' tax to 15%, as well as Vancouver implementing its own foreign buyer tax and tax on homes worth more than $3 million.

Despite these challenges it is not all bad news for these housing markets, with Lepage CEO Phil Soper saying “Home prices in Canada’s luxury real estate market have remained remarkably resilient” with the average price of a luxury home in Vancouver up 5% since last year, and luxury condos in Vancouver and Toronto up 7% and 10%, respectively.

According to Soper, these increases “reflect the strong aspirations of luxury buyers to reside and work in cities that are consistently ranked among the most desirable on the planet.”

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