The luxury housing market in the GTA is on the rebound in 2024, with a new report finding a 14.4 per cent increase in sales in January and February compared to the same period last year. But the surge in sales pales in comparison to other Canadian markets, most notably Montreal, Saskatoon and Calgary with sales increases above 50 per cent.

The luxury report by Re/Max found that almost all regions in the country saw a strong start to 2024, with a 57.1 per cent year-over-year increase in sales in January and February for Saskatoon, a 55.6 per cent increase in Montreal and a 52 per cent increase in Calgary. Ontario didn’t fare quite as well — while the GTA saw a 14.4 per cent increase in sales, that increase was just 9.4 per cent in London-St. Thomas, and sales actually decreased by 7.7 per cent in Ottawa.

But the widespread improvements in luxury sales across the country are to be expected, according to Barry Cohen, the president of Re/Max Realtron Barry Cohen Homes and a top carriage trade agent in the country. “January and February couldn’t have been anything less than stellar, because January and February of last year were so poor due to interest rates rising,” he said. 

In December of 2022, the Bank of Canada announced a rate hike from 3.75 per cent to 4.25 per cent, and in January of 2023 that was hiked again to 4.5 per cent. Since the BoC  announced a rate hike to 5 per cent in July 2023, they’ve held the rate there through five interest rate announcements, and experts are predicting a rate cut is coming soon.

Already, Cohen said the market for homes under $2.5 million is “on fire” in the GTA, with many homes seeing multiple offers and buyers going well beyond asking price.

“There is anticipation that the rate is going to be coming down — and if it does, I think the market, including the luxury market, will be on fire,” Cohen said. “A 0.25 per cent change isn’t going to be significant, really, to anybody. But it is going to signal to the population that if interest rates are already down, prices are on their way up, and they’d better get off the fence.”

The 14.4 per cent increase in sales in the GTA referred to sales of all homes over $3 million, increasing to 167 sales from January to February compared to 146 sales in the same period in 2023. But the uber-luxe market — referring to homes sold over $5 million — has been particularly hot: there were 32 sales in January and February of 2024, compared to 18 in 2023, a 77 per cent increase. However, with additional numbers for March provided by Cohen, there were a total of 52 sales from January to March in 2024 and 40 sales in 2023, which is a more modest but still significant 30 per cent increase.

The ultra-luxury market for homes over $7 million, on the other hand, saw just four sales in the first three months of 2024. The stark difference in sales is something Cohen credits in part to the new land transfer tax, which was implemented on Jan. 1, 2024. The tax increases based on the value of the home, beginning at 3.5 per cent for homes over $3 million and up to 7.5 per cent for homes valued at more than $20 million.

“Come Jan. 1, when sellers had to recognize these new rates, things came to a halt. I think people will adjust to the new tax — the adjustment period is generally six to 10 months,” Cohen said. “But that might little quicker because there is great anticipation of interest rates coming down this summer.”

The Re/Max report noted that luxury buyers in larger markets such as Toronto have migrated to more affordable mid-size cities. “Some luxury buyers looking to expand their purchasing power are moving over into markets such as London (drawing buyers from the Greater Toronto Area), Halifax, Calgary, Edmonton and Saskatoon (drawing buyers from Ontario and British Columbia).” 

Ontario saw a net loss of over 40,000 people to other provinces and territories in 2023, the biggest loss in interprovincial migration in the country.