The luxury housing market in the Toronto area shows signs of strength despite the overall downturn in housing sales activity and Canada's ongoing economic turmoil.

Sotheby's International Realty Canada found sales of homes worth over $4 million in the Greater Toronto Area (GTA) went up 21 per cent from 2023 to 2024. That compares with a one per cent increase in home sales above $1 million during the same period, or Altus Group data showing home sales in 2024 rose by 2.6 per cent from 2023.

Steady population growth and pricey properties serving as a hedge in uncertain times are buoying the appetite for luxury housing, Adrienne Lake, managing broker at Kitchener, Ont.-based Corcoran Horizon Realty, said in an interview with RENX Homes.

“There is some uncertainty in what’s going on, not just in Canada but globally. People are really looking at what’s going to happen. Do I need to invest in real estate? Do I need to hang tight with my money?”

It is a trend she expects will continue into 2025, as trade battles and potential political shifts loom over the country.

GTA luxury home sales activity in 2024

Sales of housing valued over $4 million (across single-family and attached homes and condos) went up 21 per cent to 587 properties in 2024 within the GTA, with single-family making up 91 per cent of the transactions.

High-end single-family homes were popular because "elevated prices and carrying costs changed the investment dynamics for top-tier condominiums and attached homes," the Sotheby's report states.

In the City of Toronto, the sales increase for properties over $4 million was a more modest 13 per cent, rising year-over-year to 341 properties.

Sales of condos over $4 million went up 12 per cent annually to 37 transactions, as sales of condos over $1 million fell nine per cent year-over-year to 2,266 units in 2024. Thirty-four of the 37 condos were sold in Toronto, a 31 per cent increase over 2023.

The ultra-luxury housing market is also continuing to perform. Consider 3802 - 200 Cumberland St.: located in the ritzy Yorkville neighbourhood of Toronto, the 4,012-square-foot, three-bedroom unit listed for a cool $17.8 million.

Sales of ultra-luxury homes, defined as over $10 million, went up 20 per cent to 24 properties — all single-family homes. Fourteen of the 24 were sold in Toronto, which Sotheby’s says is on par with 2023.

No condos over $10 million were sold in the GTA in 2024 - the second year in a row there were no sales in that price range.

Lake said the days when builders can sell smaller luxury condo units targeted at investors are gone. The industry will have to offer more livable units that feature more space and amenities, she noted, factors that especially come to play with an aging population.

The Ontario luxury housing market has been active even outside the GTA. Some Corcoran agents in Muskoka have reported a banner year through the fall and winter, ordinarily slow seasons.

“There is definitely the appetite for luxury and I think in 2025 it is going to continue and possibly increase,” Lake said.

The stability of luxury housing

A convergence of short supply and high demand are driving the trend, she observed. Newcomers to Canada from Southeast Asia and the Middle East are flocking to Toronto because its stability makes it a “safe place for people to put their assets.”

“The more the population grows with immigration, then of course there’s more people consuming; luxury real estate is one of those products.”

That steadiness is challenged at a time when tit-for-tat tariffs between Canada and the U.S. could badly bruise the Canadian economy. A federal election also looms. But luxury real estate remains a safe hedge against uncertainty, Lake said.

Even though trade barriers will likely harm the portfolios of the wealthy and lead them to carefully consider where they invest, Lake said their hunt for diversified portfolios will push them toward luxury housing.

“They like the security of having bricks and mortar.”

Decreasing interest rates, which have had a modest effect on stimulating overall housing sales, also impact luxury buyers though not to the same extent. Affluent purchasers have abundant cash and alternative financing options to traditional mortgages.

But falling interest rates also do not hurt. Entry-level luxury homebuyers were able to move into the homes sold by more established luxury homebuyers as they upgraded into even more expensive housing.

Sotheby’s predicts healthy sales activity for luxury housing in the coming months because of tapering interest rates, sustained immigration, pent-up demand and competition from active buyers.

“Overall, although the GTA’s luxury condominium market is projected to remain favourable for buyers in the initial months of 2025,” Sotheby’s report says. “Balanced conditions will prevail across the region’s single-family and attached home markets to start the year.”