Toronto’s luxury condo market takes a big hit as sales over $1 million drop 35 per cent

Even Toronto’s luxury market isn’t immune to condo woes as sales for units at $1 million or more plummeted 35 per cent in September, according to Sotheby’s International Realty Canada’s Wednesday report
“Toronto’s luxury condominium market shifted further in favour of buyers in the third quarter of 2024, with an abundance of supply, reserved consumer demand and downward pressure on prices,” the report said. 
As luxury inventory increased, particularly within the condo market, prospective buyers were “empowered to negotiate favourable terms and prices,” the report added.
Sotheby’s market experts said current conditions for luxury real estate purchasers are now at their most favourable since 2017 when the federal government introduced the minimum mortgage “stress test” to temper the overheated housing market. The minimum qualifying rate, or stress test, for uninsured mortgages is currently 5.25 per cent, or two percentage points above than the actual mortgage rate being offered, whichever is higher. 
At the same time, over the course of 2024, home sellers gradually adapted to this changing power dynamic, bringing their prices down to meet buyer’s expectations. 
“By the third quarter of the year, sellers demonstrated a greater willingness to price properties realistically and to make necessary concessions,” the report said. 
While single-family homes remained in a balanced market, the condo sector continued to heavily favour buyers with minimal sales and a growing number of new listings.
For the entire month of September, condo sales over $1 million saw an annual decline of 35 per cent to 96 units sold in Toronto, whereas the GTA saw less of a significant decline at 18 per cent to 148 units sold.
Early fall market sales continued a trend of lagging sales from the summer — between July 1 and August 31, $1 million-plus condo sales fell 30 per cent year over year to 209 units sold in Toronto. 
“With sales velocity waning across the region’s luxury condominium market, Toronto began the fall season with an excess of property listings, strengthening conditions that favour buyers and investors,” the report said. 
As was the case in September 2023, a single sale took place over $4 million across the GTA between in September this year, and there were no transactions over $10 million on the Multiple Listing Service (MLS).
Across Toronto, the condo market has seen a drastic rise of inventory in part from investors trying and offload their units, but also the lack of demand is leading to more properties on the market.
The GTA’s non-luxury and luxury condominium markets, which remains over-saturated with supply, will see price declines and favourable opportunities for investor buyers, especially as interest rate cuts continue, the report said.
“Market experts emphasize that Toronto remains Canada’s primary destination for immigration and net migration, ensuring long-term demand for condominiums and residential housing amidst ongoing population growth,” the report said.
“With current condominium pricing presenting attractive value, this moment offers a prime opportunity for individuals to upgrade and invest before intensified competition emerges as interest rates eventually decline.”