It has become the norm to shell out big bucks for a Toronto house – the average detached home price clocked in at $1,578,542 in April in the 416, according to the Toronto Real Estate Board. But the average single-family home in Toronto is hardly a grandiose mansion; they’re the suburban brick-and-mortar homes that, just a decade ago, were synonymous with the middle class. So, when everything costs a million bucks, what actually counts as a luxury home in a hot market?
Toronto Among Top Luxury Home Markets
According to a recent study from Christie’s Real Estate, Toronto does factor among the top markets for luxury homes. While it ranks ninth overall in terms of luxury home price, it comes up in first place in pace of sales.
This has been fueled by brisk buyer activity throughout the nation. across Canada, real estate sales increased by a staggering 44 per cent in 2016, and the Toronto market witnessed a price increase of 20 per cent. Homes came off the market within just 17 days, dropping from 28 days the year before. Lack of inventory and increasing prices helped create the sellers’ market that gave Toronto its top spot on the luxury list.
“Already-hot prime property market Toronto soared to the top of this year’s Luxury Thermometer rankings, with almost double the number of million-dollar-plus sales recorded versus the previous year,” the report noted.
What You Pay vs. What You Get
The report’s criteria for a luxury home is that it sells for more than $2.1 million, but that comes up short against the average home sale price in Toronto. Many have already pointed out how little you get in Toronto compared to what you would get for the same price tag in most other Canadian cities. A million-dollar home in the city these days is enough to get you a property that requires a complete gutting. For example, this fixer upper in Toronto’s Greektown made headlines after it sold after only 10 days on the market, at $370,000 over asking.
The definition of luxury, according to realtor.com includes 1) A high price for the area 2) prime location 3) premier quality 4) luxe amenities 5) privacy and 6) provenance. Do the homes in Toronto being sold in the million price range hit all these marks? Not quite. You might get one or two, but checking off all these points would require a much higher budget than the one set in this study. A million is becoming the minimum to get a non-luxury starter home in the city. If luxury amenities and location are your prime concern, you can get a nice condo downtown for that price – but privacy is taken out of the equation at that point.
The New Reality of Luxury
However, Christie’s report was released prior to some of the effects being felt from Ontario’s Fair Housing Plan. Following the introduction of foreign buyer and speculative activity taxes in April, many in the industry have noted a palpable shift in the market; home sales have dipped as much as 61 per cent in parts of the Greater Toronto Area between late April and May, according to Realosophy, though prices haven’t yet followed suit. In addition, TREB reported a surge of inventory immediately prior and following the announcement of the rules, though the Toronto condos market remains red hot. It remains to be seen whether greater choice and fewer buyers will greatly impact the sale of detached houses – and Toronto’s current ranking on the luxury scale.