Rachel Mendle­son – Huff­in­g­ton Post

High-income buy­ers are a dri­ving force behind Toronto’s boom­ing hous­ing mar­ket, fuel­ing demand for an extremely lim­ited sup­ply of prop­er­ties in desir­able areas, says one real estate broker.

Accord­ing to Paul Maranger, a senior vice-president at Sotheby’s Inter­na­tional Realty, this year has seen a surge in activ­ity in the lux­ury real estate mar­ket in Toronto, as buy­ers increas­ingly chase a “Man­hat­tan type of lifestyle.”

“Toronto at the lux­ury level is not look­ing for value. They’re look­ing for con­ve­nience,” he said on Thurs­day. “Many of our clients who work in the finan­cial dis­trict, they’re work­ing incred­i­ble hours at the office, and they are will­ing to pay a sub­stan­tial pre­mium to not have to do any extra work.”

Maranger was one of sev­eral real-estate experts made avail­able to reporters on a con­fer­ence call to dis­cuss the BMO Spring Hous­ing Report.

When it comes to the chang­ing tastes of the wealthy, Maranger says the desire to walk to restau­rants and the the­atre is putting added pres­sure on prop­er­ties in the city cen­tre, and par­tic­u­larly single-family homes, which have become increas­ingly rare in Toronto due to a lack of avail­able space.

Com­pared to the same period last year, Maranger says sales of “lux­ury” single-family homes ($2 mil­lion or more) in Toronto have so far increased by more than one-third, from 95 to 128.

Demand has been par­tic­u­larly strong along the sub­way lines, says Maranger, who cited the recent sale of a home in the Sum­mer­hill neigh­bour­hood for more than $300,000 over the ask­ing price as evi­dence of this trend.

“For a city the size of Toronto, we are grossly under-serviced from a sub­way per­spec­tive,” he said. “What we’ll see as a result of that, and what we’re see­ing now, is a dis­pro­por­tion­ate demand, par­tic­u­larly along the Yonge sub­way cor­ri­dor. Buy­ers are will­ing to pay a sub­stan­tial pre­mium to be on that line, and cer­tainly on the [Bloor-Danforth] line.”

This increase in activ­ity at the upper-end is rip­pling through the real-estate mar­ket, he says, push­ing up prices of single-family dwellings across the city.

“There cer­tainly is a Domino effect in the mar­ket­place,” he said, not­ing that demand for detached homes just under the lux­ury level has grown fever­ish, with bid­ding wars and mul­ti­ple offers becom­ing increas­ingly common.

“To get into the mar­ket­place now […] the entry level price point is about half a mil­lion dol­lars, which is a sub­stan­tial amount of money,” he added.

This obser­va­tion adds weight to warn­ings of some observers, who have argued that grow­ing income inequal­ity may be ratch­et­ing up house prices on the whole, and pric­ing low and middle-income earn­ers out of the city centre.

Demand for single-family homes at the high-end com­bined with what Maranger describes as the tight­est mar­ket he has seen in 15 years, has con­tributed to a boom in condo devel­op­ments.

The recent increase in condo con­struc­tion — and damp­en­ing demand in the for­merly white hot Van­cou­ver mar­ket — have prompted some to ques­tion the fun­da­men­tals of the Toronto mar­ket. But Maranger pre­dicts activ­ity at the high end of the mar­ket will remain strong.

“We have an incred­i­bly strong base of high-income house­holds who work pre­dom­i­nantly in the finan­cial dis­trict, and in finan­cial law, edu­ca­tion and health care,” he said. “From a mid-to long-term per­spec­tive, Toronto is going to hold itself in very good stead in the lux­ury market.”

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Con­tact the Jef­frey Team for more infor­ma­tion – 416−388−1960

Lau­rin & Natalie Jef­frey are Toronto Real­tors with Cen­tury 21 Regal Realty.
They did not write these arti­cles, they just repro­duce them here for peo­ple
who are inter­ested in Toronto real estate. They do not work for any builders.
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his­tor­i­cal increase in house prices in leaside

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