In the Greater Toronto Area, although overall home sales are down (as we previously reported), one type of home is significantly up — luxury condos. Not only are sales of luxury condos up nearly 100 percent over last year (according to Sotheby’s), prices are up on all types of condos, signalling a possible shift of lifestyle preferences.

Defining the luxury condo becomes somewhat difficult in a market where the average condo price in the GTA is $519,784. On Sotheby’s definition, it’s $1million for a condo. (In a detached home, an average home is $1.056 million.) One reason, may, in fact, lie in those numbers.

The same $1 million dollars spent on a condo buys luxury living, versus an “average” lifestyle in a detached home. Luxury living is all about location and comforts. A million dollars still buys a great urban location in condos, while in detached homes it typically pushes you out to the fringe areas.

Not first-time buyers

The surge in sales in luxury is easy to account for demographically. Baby Boomers are looking to right-size from empty nest houses, but want to retain a comfortable life style. Growing families, on the other hand, are moving up to luxury condos in prime locations rather than small houses in less-desirable locations — valuing time saved (reduced commute) and luxury amenities over a small 15 foot-wide yard.

Then, there are the big, big spenders, motivated more by psychographics (such as lifestyle) and disposable income than by demographics.

In the class of properties listing for over $4 million, sales are actually up 150 percent year over year. This class of buyer isn’t worried about local economic swings, but more motivated by lifestyle.

Typically, the affluent homeowner doesn’t consider the primary home as a core investment (even though, obviously, it’s a valuable asset.)

Rate hikes not a factor in luxury

Luxury buyers are also less influenced by rate hikes, at least at current levels. Typically, if they have a mortgage it’s a financial planning choice, not a necessity.

The combination of “wait and see” market — triggered by new Ontario Government rules — and rate hikes from the Bank of Canada have little impact generally on luxury buyers.

Luxury buyers mostly in Toronto

The big double and triple digit increases in luxury sales are mostly limited to Toronto. Toronto, after all, is the money capital of Canada. Luxury sales in Toronto easily outpaced Vancouver, Calgary and Montreal.

What’s Up with Condos? Sales of Luxury Condos Up 98% from Last Year (Sotheby’s) & Prices Up on All Condos by Condo.ca