Canada’s spring luxury real estate market is well underway in Canada’s largest cities. While sales in Greater Vancouver and the Greater Toronto Area (GTA) are significantly down in the first four months of the year, luxury home prices have remained relatively resilient, according to Royal LePage.
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Overall, sales activity declined in Greater Vancouver and the GTA luxury real estate market as both sellers and buyers adjusted to federal and provincial measures affecting both domestic and foreign buyers. The introduction of the new mortgage stress test implemented by the Office of the Superintendent of Financial Institutions (OSFI) at the beginning of 2018 created market turmoil as buyers moved to the sidelines in order to gauge the impact on luxury home prices, similar to what was witnessed in the overall residential resale market. More significantly, in British Columbia, the 2018 provincial budget included policies targeting foreign and domestic buyers who do not pay tax in the province, as well as a tax increase for all homes over $3-million through increases to the property transfer and school tax. Similarly, the non-resident property tax included in Ontario’s 16-Point Fair Housing Plan dampened price expectations for the GTA region.