The Greater Toronto Area’s (GTA) luxury housing market experienced a significant upswing in the final quarter of 2024 (Q4), with sales of properties over $3 million increasing by more than 40 per cent compared to the same period in 2023.

According to Re/Max Canada, over 360 freehold and condominium properties sold in Q4, a notable jump from 259 sales during the same timeframe last year.

“The impact of the first and second 50-basis-point rate cuts by the Bank of Canada radiated throughout the GTA in the fourth quarter, jumpstarting demand for high-end properties both within the city and suburbs,” says Re/Max Canada President Christopher Alexander.

“We’ve been expecting a surge in top-tier sales activity as the economic climate and corresponding pause in buying intentions prompted a build-up in pent-up demand. The fourth quarter did not disappoint.”

 

Record sales in GTA’s luxury real estate

 

Toronto proper accounted for 53 per cent of luxury sales, with suppressed property values creating opportunities in ultra-luxury price ranges between $5 million and $7.5 million. 

Properties over $5 million saw the most significant growth, with sales jumping nearly 59 per cent year-over-year. The $7.5 million and above category also posted gains, with sales increasing by 41 per cent, while properties over $10 million held steady compared to 2023.

Interestingly, nearly half of all $5 million-plus sales occurred in suburban areas, reflecting a growing preference for luxury homes outside the city core.

 

Catalysts driving growth

 

Several factors contributed to the resurgence of the luxury market:

• Lower interest rates. The Bank of Canada’s 100-basis-point reduction in 2024 fueled buyer enthusiasm.
• Stock market gains. Strong performances by the NASDAQ, and S&P 500 and TSX bolstered confidence among affluent investors.
• Easing inflation. Reduced economic pressures encouraged profit-taking, converting financial gains into property investments.

 

Luxury market outlook for 2025

 

While inventory challenges persist, rising buyer confidence and robust equity markets set the stage for sustained growth in Toronto’s luxury market. Affluent buyers are moving off the sidelines, and strong demand is anticipated to continue, particularly for single-detached homes.

Additionally, intergenerational wealth transfer and increased interest from international buyers, including affluent Chinese immigrants, are expected to support the high-end market.

Alexander says buyer optimism is growing, thanks to robust equity markets and lower interest rates, along with Canada Mortgage and Housing Corporation extending insurance coverage to $1.5 million for first-time buyers. “The ripple effect is expected to carry through to all price points, including the top end, as younger buyers return to the housing market.”

He also notes the political climate’s evolution from upcoming leadership changes in Canada and the United States should impact the market. However, Alexander remains optimistic.

“With the fundamentals that we are seeing take shape, we’re poised to not only sustain the strong level of luxury activity of 2024 but surpass it in 2025.”

 

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