The real estate market in Toronto and the GTA is changing, especially for luxury customers. Intensification is the name of the game, with less and less land available for residential use, more prospective home buyers searching for the ideal detached home in a walkable neighbourhood, and existing communities fighting the construction of condominium buildings and similar development projects.
So, where are Toronto's luxury buyers going? And who are they? Foreign investment in Toronto's luxury market has become a major trend this year, with buyers from the US, China, Russia, and the Middle East making up the majority of the international crowd. These international buyers are driving prices up throughout Toronto, where a small bungalow in Willowdale recently sold for $421,800 over the asking price to a Chinese university student. That's just the tip of the iceberg.
Luxury real estate sales are expected to climb, in part because recent changes to the mortgage rules in Canada have less impact on luxury buyers. However, the demand seems higher for detached homes, creating a price gap at a time when a surprising number of luxury condos are available. From what we can tell, luxury buyers from Canada and other parts of the world are looking for the same thing: a detached home with modern amenities in a good area, with reasonable density and little crowding. They may also be looking for homes they can knock over and renovate from the ground up, which has become a trend in Willowdale and elsewhere. Also, more international buyers may be looking in communities where their first languages are spoken, such as Vaughan and Markham. While urban centres are usually heralded for their diversity, communities where you can raise a child with two languages among others who share their culture can be harder to find -- especially if you're looking for a large home that can house multiple generations of the same family.
So, where should you buy if you're looking for an area in Toronto with detached homes that will change over time, or where you can spend more money on a luxury renovation after purchase? Try Eglinton West or Little India, where residents priced out of surrounding neighbourhoods are settling and gentrifying. In ten years these neighbourhoods will have come into their own, and they'll be the next target of luxury buyers who want to be close to the city without sacrificing space.