Luxury homes growing in property type, area and buyer

Only a few years ago, luxury homes in the GTA were a pretty narrowly defined market. Ultra-exclusive highrise condos in the Financial District, and a few in tony Yorkville, snapped up by the established and well-heeled.As we approach 2015, however, the luxury landscape is changing dramatically. Thanks to what some call a “perfect storm” of low interest rates, rising real estate values and a solid employment picture, the category is expanding in terms of geography and property type. It’s also opening up to a younger generation of buyers.“This trend can be attributed to the boost in immigration, in addition to international investors, strong consumer confidence and low interest rates,” says Alda Neves Dube, director of sales and marketing for Intercity Realty Inc., Brokerage, Vaughan, Ont.

Younger buyers

Not only are people entering the market for luxury homes at a younger age, they can afford more, according to Debbie Cosic, CEO, broker of record at In2ition Realty, Mississauga, Ont.“We have interest rates currently available at 2.35 per cent, while 10 years ago, the average interest rate was 5.78 per cent,” says Cosic. “This means a $500,000 mortgage 10 years ago carries for almost the same amount as a $1-million mortgage does today.”

Buyers now have a wider range of choices for both neighbourhood and housing type. There are still plenty of highrise options in the downtown core and Yorkville, but also expanding offerings outside the city – including luxury condos in Vaughan, and townhomes and estate homes in a variety of locations that appeal for different reasons.“We have seen the greatest growth in our 905 new home luxury markets, particularly Oakville and Mississauga,” says Cosic. “Out of our eight current luxury home developments, we have seen an average of 10 per cent growth annually, where the comparable resale market has increased at six per cent.”

Neves Dube says suburban locations such as Vaughan, Brampton, King City, Nobleton and Markham are able to offer more for less. “Larger lots, abundant greenspace, unparalleled features and finishes, gourmet kitchens, lavish ensuites, wine cellars and more – all for less than you would pay for in the city.”

Highrise versus lowrise

What distinguishes lowrise luxury buyers from their highrise counterparts is usually one thing – lifestyle.“The benefits of highrise luxury living are far beyond stunning views and turnkey lifestyle,” says Neves Dube. “It extends to exclusive use to an array of building amenities and services, such as concierge and security personnel, full spa, state of the art gym facilities, entertaining rooms, landscaped terraces, in-house dining and restaurants.”

Buyers of lowrise luxury homes, on the other hand, are looking for generous yard and interior space, often in communities with natural surroundings and close to everyday amenities. The homes are richly appointed with the highest architectural standards, and boast generous and detailed outdoor spaces.“There tends to be a shortage of lowrise luxury home listings in the city, creating intense competition and driving prices up,” says Neves Dube. “However, the 905 offers an ample variety of quality crafted luxury home types, ranging from executive towns and semis to lofty bungalows and detached estate homes.”

None of the factors driving luxury market demand are likely to weaken in the next year or so, says real estate consultant and investment expert Don R. Campbell, so the growth should continue, though perhaps not at the same pace as the last couple years.