The housing market is booming and the way it behaves, it is pushing the threshold for luxury housing in the upward direction.
In recent years, many houses in Toronto were sold for at least a million dollars, triggering speculations that $1 million may no longer be appropriate as the threshold figure and an adjustment is needed to truly reflect actual housing valuations.
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Averages are pushing higher and higher year after year. The national selling average was placed at $500,000 in May this year. That hardly reflects prices in Vancouver and Toronto, and pales in comparison with the past figures recorded for the two cities.
Back in 2014, average prices of detached homes in Toronto approached $900,000. For Vancouver, it was $1 million. These prices prompted housing experts to say that a $1.5-million home bought in Toronto could hardly pass for a luxury property. The same goes for a $2-million house bought in Vancouver.
Experts settled with the following values for 2016. Houses valued at 1.8 million in Greater Toronto were considered luxury. In the region of Vancouver, the threshold price set was 3.6 million. Prices are placed even higher in posh residential neighborhoods that are within city limits.
There are several factors at play why luxury prices are going up in these areas. These cities are the two largest housing markets in Canada. Next, optimism about the future is high among the residents. Third, unemployment rate is low. Also, interest rates are stable and low.
People Picking Houses Out of the Metros
Experts also noted the tendency for people to go away from the city and that demands are getting higher in less urban areas. The big mansions are sprouting somewhere else to accommodate those who prefer to live outside the city.
For people with very large budgets like $10-million may choose to be in or just close to the metro. There are good options in plush neighborhoods like Rosendale.
But for most of the market, the trend is pointing to less dense areas like Bradford and Keswick. Suburban houses are currently the ones getting the attention, but they are getting to be saturated as well.
The increasing demand for suburban houses like those in Newmarket and Aurora is pushing people to go to farther-flung communities like Bradford. If you are looking for a luxury house in Bradford, now is the best time to shop.
A Geographical Way of Looking at Luxury Housing
In the first two months of 2017, 137 GTA houses were sold with prices averaging $3.25 million. It is tempting to use that value as the new threshold.
But not so fast. People are now looking at things in a geographical way. In non-hot markets, houses are selling and being bought at rather astonishing prices, shocking even the most experienced mortgage broker.
For example, an ordinary house on Cheritan Avenue was recently sold for a whooping 3.298 million. That house was not in Forest Hill or in Moore Park. It sold for a price that was way beyond 2.5 or 2.7 million bucks that the seller expected.