Luxury Property Report | 2022 Year In Review

HOMES

Market Commentary by Barry Cohen

Luxury home sales in the GTA outperformed the overall market in an erratic 2022. Stability appears to be on the horizon for the year ahead.

I’ve been fortunate enough to guide my clients through eight different market corrections, but 2022 was certainly one of the most interesting years I’ve experienced in my career. The Bank of Canada’s aggressive approach to curbing inflation, by raising the overnight rate by 4.0 per cent over nine months, placed a serious damper on homebuying activity in the Greater Toronto Area (GTA). There were 75,140 sales reported through the MLS system in 2022 down 38.2 per cent compared to the 2021 record of 121,639. What the media is not reporting is that the average price for the entire market is actually up 8.6 per cent from a year ago, though we saw prices rapidly rise 25 per cent in Q1, then fall by almost an equal amount in Q2. Prices appear to have leveled off in the second half of 2022, which has given me confidence in the overall health of the market ahead and suggests that we are either at the bottom or close to it.

The luxury market overall has held up relatively well, with sales over $2 million down just under 20 per cent year-over-year, when you consider that sales for the entire market were down 38.2 per cent. The average price for a detached house in Central Toronto in 2022 was $2,659,518, up 5 per cent from 2021. Condos in Central Toronto sold on average for $827,833, up 10 per cent from 2021. Also, our own calculations suggest that while sales over $2 million have softened, the average price of a luxury home priced over $2 million is at least on par or ahead of year ago levels in almost 80 per cent of 416 neighbourhoods we examined.

Luxury Freehold/Condominium Sales in the Greater Toronto Area

Source: Barry Cohen Homes, Toronto Regional Real Estate Board (TRREB), Market Watch

BARRY COHEN President & Broker

It’s clear that the rapid rise in interest rates caused a shock to consumers and made people nervous, resulting in a dramatic reduction in transactions. While buyers wait on the sidelines, inventory levels are down because sellers too have taken a wait and see approach. Though in a few rare cases I am seeing a lowball offer and great deal, for the most part sellers are being patient and buyers are frustrated that they can’t find anything to buy.

So what’s in store for 2023 and beyond?

Stability has been top of mind with today’s buyers and sellers and it does seem like we are starting to get some. As mentioned earlier, prices have been fairly flat for the last six months. The limited inventory levels, largely responsible for the run-up in housing values over the pandemic, continue to persist throughout much of the 416 and to a lesser extent, the 905, keeping housing values on an even keel. Consumers are getting increasingly comfortable with interest rates of around 6 per cent being the new normal and as a result, I believe we will start to see more inventory come to the market, which will result in more transactions and likely greater price flexibility. Most importantly, at the time of writing this letter, the Bank of Canada just raised the overnight rate by another 25 bps to 4.5 per cent and stated that they are likely to pause their monetary tightening policy for some time, signalling to many that the worst is behind us. This should get many buyers and sellers off the fence and into the market.

Though inventory will rise, we still have a dramatic housing shortage. Our immigration target to add approximately 1.45 million new Canadians by year-end 2025, most of whom will settle in the Greater Toronto Area, will put a further strain on prices. Given that approximately 60 per cent of immigrants are admitted in the economic class, the future bodes well for the Greater Toronto housing market. We know that economic growth will be tempered in 2023, but life events will continue to occur, prompting the sale or purchase of real estate.

I anticipate that prices in early 2023 will remain stable, with a chance of modest seasonal increases throughout the year. I do believe that the lowest inventory period will be the first three months of the year as households continue to adjust to the new reality and sellers wait for the spring market. Consequently, this should be the most opportune time for sellers as they face very little competition and buyers armed with annual bonuses and New Year’s resolutions.

If you would like to learn how our clients reaped values well beyond the market or merely wish to discuss the year ahead and the opportunities I see in more detail, please don’t hesitate to reach out to me or anyone on my talented team. You can reach us at 416-223-1818, we’re never too busy to talk real estate.

Wishing you a happy and healthy 2023,

Barry Cohen

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The Greater Toronto Area’s Top Luxury Markets

Bridle Path-Sunnybrook-York Mills, St. Andrews-Windfields-Hoggs Hollow (C12)

More than 150 freehold properties sold over $2 million in the Toronto Regional Real Estate Board’s C12 district comprised of the Bridle Path-Sunnybrook-York Mills and St. Andrew-Windfields-Hoggs Hollow in 2022, 56 of which moved for more than $5 million.

While the number of homes sold in the areas have declined year-over-year, prices have held up exceptionally well. In the St. Andrew-Windfields-Hoggs Hollow neighbourhoods, the 2022 average price over the $2 million price point sat at $4,202,941, up 10 per cent over the $3,803,987 reported in 2021. Sales over the $5 million price point were on par with year ago levels.

In the Bridle Path-Sunnybrook- York Mills area, average price over the $2 million mark has risen to $5,879,586 in 2022, an uptick of four per cent over the $5,680,087 reported in 2021.

Not surprisingly, the area, which boasts some of the most spectacular properties in the Greater Toronto Area is the most expensive in the 416-area code. Many of the homes and estates that are found in the prestigious Bridle Path area are valued at well over $20 million.

Estate properties, larger homes, and generous lot sizes continue to attract buyers to the area. A good selection of properties can be found within C12 boundaries. Between the Bridle Path-Sunnybrook-York Mills and St. AndrewWindfields-Hoggs Hollow areas, there are 73 homes currently listed for sale over the $2 million price point. Of these, almost 35 per cent are listed under the $5 million price point.

Bridle Path-Sunnybrook-York Mills

Average Sold Price 2022 $5,879,586

Average Sold Price 2021 $5,680,087 4% Year-over-year

St.

Hollow

Average Sold Price 2022 $4,202,941

Average Sold Price 2021 $3,803,987 10% Year-over-year

Forest Hill South, Humewood-Cedarvale (C03)

Strong demand continues to exist for freehold properties within Forest Hill South and Humewood-Cedarvale, just two of the neighbourhoods located within the Toronto Regional Real Estate Board’s C03 district. The area offers up a good selection of freehold properties at virtually every price point, from starter homes in the Humewood-Cedarvale area to extravagant estates in the heart of Forest Hill.

Fifty-six homes sold over the $2 million price point in Forest Hill South in 2022, 24 of which sold for at or over $5 million and 6 were priced over $7.5 million. Average price (over $2 million) has remained relatively stable, despite the inflationary environment. Values in Forest Hill South in 2022 hovered at $4,792,162, a modest increase over the $4,682,484 reported in 2021.

Although young families continue to be drawn to the HumewoodCedarvale neighbourhood, just 25 homes sold over $2 million in 22, down from 32 one year ago. Sales over $3 million, however, were up 29 per cent in the area, with 9 properties changing hands in 2022, up from 7 in 2021, indicating some move-up activity.

Inventory levels remain a challenge in Humewood-Cedarvale, with just five properties currently listed for sale over the $2 million price point. Approximately 20 homes are available at $2 million plus in Forest Hill South.

Hill South

Rosedale, Moore Park (C09)

In 2022, sales over $2 million in the prestigious Rosedale-Moore Park area have softened by just over 30 per cent, compared to year-ago levels. Ninety-four homes over $2 million changed hands in 2022, down from the 136 sold during 2021.

With just 11 properties currently listed for sale over $2 million, many would-be buyers are hampered by lack of product, especially at the top end of the market. Sales of homes priced over $7.5 million are down by over 83 per cent from yearago levels, with just two homes sold at that price point in 2022, compared to twelve in 2021.

A dearth of sales at the top end of the market has likely contributed to softer values in Rosedale-Moore Park, with the average price over the $2 million price point now hovering at just over $3.95 million, down from close to $4.3 million one year ago. Just 11 properties are currently listed for sale over the $2 million price point.

Rosedale, Moore Park

January 1st - December 31st, 2022 vs. same period in 2021

Average Sold Price 2022 $3,950,650

Average Sold Price 2021 $4,317,584

-8% Year-over-year

SOLD | 11 Ormsby Crescent Represented the buyer

CHAPLIN ESTATES CONTEMPORARY Offered at $3,880,000

SOLD | 247 Forest Hill Road Represented the buyer

Yonge-St. Clair, Casa Loma, Annex (C02)

While sales over the $2 million price point have faltered year-over-year in the Toronto Regional Real Estate Board’s C02 district, the number of homes sold at higher price points, particularly in the soughtafter Annex area, have proven resilient.

Thirty-eight freehold properties over $3 million changed hands in the Annex in 2022, an increase of just over 22 per cent from year-ago levels, while sales over $5 million have climbed steady. Revitalization of the area’s spectacular historic properties, especially in the area west of Avenue Rd. and north of Bloor St., has attracted many a buyer to this neighbourhood last year. Average price (over $2 million) has climbed four per cent over year-ago levels, rising to $3,419,236.

Higher-end properties in the Yonge-St. Clair area have also gained momentum, registering a nearly 17 per cent increase in the number of sales over $5 million in 2022 vs the year prior. Seven properties sold over the $5 million price point, an increase over the six sales in 2021. Average price is up one per cent to $3,251,393, rising slightly from $3,232,985 one year ago.

The number of properties sold over $2 million in the Casa Loma area have declined year-over-year, but the sale of three homes over $7.5 million have helped support average price. In 2022 values (over $2 million) hovered at just under $4.2 million. Listings remain scarce in the neighbourhood, with just 11 properties currently listed for sale over $2 million.

SOLD | 114 Hazelton Avenue Represented both the seller & buyer

3/4 ACRES IN CASA LOMA ENCLAVE Offered at $25,000,000

January

Casa Loma

January 1st - December 31st, 2022 vs. same period in 2021

Average Sold Price 2022 $3,419,236

Average Sold Price 2021 $3,280,969

4% Year-over-year

Average Sold Price 2022 $4,172,778

Average Sold Price 2021 $3,475,526 20% Year-over-year

Leaside (C11)

Despite the current housing slowdown, Leaside continues to experience strong demand for properties priced over $3 million. Thirty-seven homes sold in 2022, up almost 20 per cent over the 31 sales posted one year ago. Three homes moved over the $5 million price point.

Average price (over $2 million) has followed in lockstep, with an eight per cent increase reported in 2022, bringing values to $3,087,312, up from just over $2.8 million one year ago.

Given solid demand for homes in the area and a shortage of available listings (just 4 currently available over $2 million), values should remain steady for the foreseeable future.

Leaside

January

Average Sold Price 2022 $3,087,312

Average Sold Price 2021 $2,854,663 8%

SOLD | 48 Sharron Drive

Bedford Park, Lawrence Park, Lytton Park, Forest Hill North (C04)

The highest number of sales over the $2 million threshold can be found within the boundaries of TRREB’s C04 district -- Bedford Park-Nortown, Lawrence Park North and South, and Forest Hill North. Collectively, more than 300 freehold properties changed in 2022, with most sales (137) occurring in Bedford Park-Nortown (where we saw one sale over $7.5 million in 2022, up from zero the year prior). Average price (over $2 million) in this area was up four per cent over 2021, now hovering at close to $3.2 million.

Homebuying activity in the upscale Lawrence Park (North and South) neighbourhoods have fallen short of year ago levels at most price points in 2022, yet average prices continue to hold relatively steady. Lawrence Park South reported a modest three per cent increase in the average price over $2 million, rising to just over $3.6 million while Lawrence Park North saw a two per cent uptick, bringing values close to $2.8 million. There are 22 properties currently listed for sale in Lawrence Park.

Tight inventory levels in Forest Hill North brought sales over $2 million down by 35 per cent in 2022. The decline in sales lead to a three per cent decline in average price, which now sits at approximately $2.85 million. There are 5 properties available for sale in the neighbourhood at present.

Bedford Park-Nortown

January 1st - December 31st, 2022 vs. same period in 2021

Lawrence Park North

January 1st - December 31st, 2022 vs. same period in 2021

Park South

Average Sold Price 2022 $3,613,935

Average Sold Price 2021 $3,516,956 3% Year-over-year

Forest Hill North

Average Sold Price 2022 $2,853,725

Average Sold Price 2021 $2,946,914 -3% Year-over-year

SOLD | 574 Deloraine Avenue

TEDDINGTON PARK STONE MANOR Offered at $4,680,000

SOLD | 176 Briar Hill Avenue

SOLD | 39 Chudleigh Avenue Represented the buyer

Banbury-Don Mills (C13)

Homebuying activity within the coveted Banbury-Don Mills neighbourhood has diminished year-over-year, with just 61 houses changing hands in 2022 over $2 million. Sales at the $2, $3 and $5 million price points fell short of year ago levels, but average price over $2 million in 2022 held stable at $3,303,183, up three per cent in comparison with the $3.2 million posted in 2021.

Banbury-Don Mills has traditionally provided younger buyers with more affordable detached housing options -- typically homes with more square footage and larger lot sizes --close to schools and amenities. With interest rates rising so rapidly in 2022, both buyers and sellers find themselves at a stalemate. Buyers are keeping their eyes open, but with just 21 properties listed for sale, it has been a real challenge.

Banbury-Don Mills

Average Sold Price 2022 $3,303,183

Average Sold Price 2021 $3,218,765 3% Year-over-year

SOLD | 15 Purling Place

SOLD | 25 Denlow Boulevard

Luxury Condominiums (GTA)

The Greater Toronto Area’s condominium sector continues to demonstrate exceptional resilience considering current market conditions. Luxury sales were off last year’s breakneck pace by about 21 per cent, yet nearly 250 apartment and townhouse condominiums changed hands over the $2 million price point in the GTA in 2022, with most of those sales occurring the Toronto’s downtown core.

Empty nesters and retirees downsizing from large, detached homes contributed to sales over the $3 million threshold, with 83 properties reported sold in 2022, down approximately 19 per cent from year ago levels. At $5 million plus, there were 13 homes that changed hands, down from the 21 sales in 2021. The most soughtafter areas for luxury condominiums over $3 million remain constant -- the Annex/Yorkville (22), the Bay St. Corridor (11), Yonge-St. Clair (10), and Rosedale-Moore Park (6).

Average price of luxury condominiums has also held up well year-to-date, with values edging close to $3 million in 2022, down two per cent over values for the same period in 2021.

Luxury Condominiums

January 1st - December 31st, 2022 vs. same period in 2021

Average Sold Price 2022

$2,954,333

Average Sold Price 2021 $3,000,203

STUNNING HAZELTON HOTEL CONDO Offered at $9,990,000

SPECTACULAR 1 ST THOMAS STREET Offered at $7,995,000

FAMED FOUR SEASONS RESIDENCES Offered at $3,995,000

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