What Lays Ahead For The “High End” Of Toronto’s Market?

And what do you consider “high-end” anyways?

Maybe that’s a question we should answer, while we’re at it.

But whatever you consider “high-end” in Toronto, there’s no doubt that it’s hot real estate right now.  And while many people (myself included) might have expected prices of high-end homes to stagnate, those prices are continuing to rise.

So what’s the future of high-end real estate in Toronto?


It took every ounce of restraint in my body to not come up with a cheezy title for this blog with the term “high.”

I had a few in mind, but then when I looked up Carolyn Ireland’s column from last Friday’s paper – appropriately titled, “High Times For The High End,” I didn’t want to come off as unoriginal…

So what does the “high-end” of Toronto’s market look like to you?

It’s a question with a relative answer, depending on who you are, where you come from, and where you find yourself in 2015.

Is $1,000,000 the “high-end?”  It is if you rent, that’s for sure.

But in reality, the average price of a detached home in Toronto is over $1,000,000, so that can’t be considered “high-end.”

Is it over $2,000,000?  That’s fair, and I might not necessarily argue with that.

Is it over $2,500,000?  Or are we now just splitting hairs?

I’m of the opinion that the “high-end” starts at $3,000,000, and while that doesn’t exclude a house on the same street that’s $2.9M, you have to draw the line somewhere.

Or maybe you want to look at properties geographically?

If a house sells in Moore Park for $2,800,000, is it not high-end, if the houses on either side sold for $3.2M and $3.3M respectively?

Should we simply label Forest Hill, Rosedale, Moore Park, and of course – the Bridle Path, as “the higher ends?”

Would that leave out areas like Banbury, Lawrence Park, Leaside, et al?

Okay, that’s a lot of lines ending with question-marks, so I’ll stop asking leading and/or rhetorical questions.

That was just some food for thought as we move into a discussion about the future of high-end real estate in Toronto, as we all might have different opinions on what high-end actually is.

I’ve always thought of the high-end as $3,000,000 and up, but as prices continue to rise, perhaps that won’t hold correct any longer.

For example, when I got into the business in 2003-04, a “new build” on a 30 x 120 foot lot in Leaside was $1,000,000, and something of the 36 x 140 variety might be $1.4-$1.5M.

As time went on, as tastes and preferences changed, and as houses on the whole in our city got fancier, those numbers went up to places that currently astonish me.

How about $2,800,000 in Leaside, today?

It boggles my mind.

Now I’m not picking on Leaside, but rather I use it as an example because I grew up there, and because I always thought Leaside was a step down from Moore Park, and Moore Park was a step down from Rosedale, and Rosedale is considered a “high-end” area.

But is “high-end” geographic, or is it about price?

Because to be honest, and fair, to my dear Leaside, I don’t know if many people consider it to be “high-end” as far as Toronto goes.

The Bridle Path?  Forest Hill?  Rosedale?  Sure, that’s high-end.  But Leaside?

$2,800,000 in Leaside?  Is that “high-end?”  Or is it just “high price?”

Perhaps it’s a function of price, and location, but also the price relative to another location, ie. “The same price that gets me “X” in Leaside only gets me “Y” in Moore Park.”

Honestly, we could debate this all day.

The point I want to address is this: what do we expect to happen to the high-end market?

Personally, I theorized about 18 months ago, that the $3,000,000++ market was going to remain flat.

I was wrong.  Dead wrong.

I figured that the supply and demand equation in this market was completely different from the “entry-level” houses, which were at the time, in the high-$600’s.

I figured that a large portion of $3,000,000 homes, the “old money,” if you will, would be put onto the market as Baby-Boomers look to cash out, time the real estate cycle, or both.

And I figured that while there’s two, three, or twenty buyers for every $699,000 house in Toronto that goes up for sale, the same can’t be said for the $3,000,000 market.

I figured wrong.

The $3,000,000++ market is moving, and it’s moving quickly.

I mentioned Carolyn Ireland’s article from the Globe & Mail, which describes three houses in the “high-end,” all that sold in mere days for full-asking.

And I’ve witnessed this first-hand as well.

My friend’s family home went up for sale last week at just over $3.5M, and it was sold in three days, for full asking.  The sellers were gearing up for a long, dreary Fall, and family meetings about “what to do” with the listing.  I think everybody was shocked when the house sold, and the price was actually more than what the seller had initially thought it was worth.

The Globe & Mail article notes:

“Sales in the segment above $4-million surged by 72% in the GTA in the first half of the year compared with the same period in 2014.”


72%, for realzies?

Am I the only one who thinks that number is insane?

It’s scary, actually, in terms of how much the market has changed.

We’re not talking about prices being up 9.5%, or new listings being down 11.2%.  We’re talking about sales in a certain segment being up seventy-two percent!

So what is driving the increase in prices, and the increase in sales?  And is that the more important question than “what is going to happen?”

Well one reason, whether you like it or not, is foreign investment.

I know, I know – the term “foreign investment” is a buzz-word that everybody is growing tired of, and it seems to be the reason, excuse, and cause of just about everything in and around our market.

But let’s just look at a couple quick discussion points:

1) The Canadian Dollar

It shouldn’t come as a surprise that this is headlining the list.

The Canadian dollar has plummeted against virtually every other currency on the planet.

It’s down 23% against the USD in the past two years, just shy of 6% against the Euro – even in the awful economic climate in Europe, and it’s down 13% against the Singapore Dollar.

Buying real estate in Canada is cheaper than it was before, whether it’s a $250,000 condo, or a $4,500,000 home in Forest Hill, and who doesn’t like a deal?

So here we have one of the hottest real estate markets on the planet, AND we get a substantial discount?

No wonder foreign investment is up…

2) The “Safety” of Canadian Banks & Markets, Relative To China

Here’s an excerpt from the Globe & Mail article on Toronto developers going directly to China to court buyers:

Another consideration is purely financial: Where will his money do best? Mr. Li recently sold a property in Shanghai, and has watched China’s house prices weaken and its markets crash. In a bull market, buying stocks makes sense. Now, in more turbulent times, Canada looks safer.

“I don’t think the risk in buying a Canadian house is too high,” he says. “I have faith in Canada’s social security. And the way they operate is not like the Chinese market, where there are no rules.”

If I’ve heard this once, I’ve heard it a thousand times.

Many wealthy residents of countries with unstable political climates fear for their money, and would rather have it in Canadian real estate than in a bank account in their home country.

It’s one reason why we think foreign investment has fueled the downtown Toronto condo boom, but now we’re seeing it spread into the high-end market as well.

3) “True Wealth”

Do we even know what true wealth really is?

A friend of mine was in Monaco on a family vacation, and just for fun, he went to an open house for a brand new condominium being built, over the water.

Funny story – he walked up to the condo and the agent there took one look at him and immediately asked, “Who are you representing?”  She didn’t think he was there for himself, as he didn’t look like he had money.

He immediately replied, “Mark Zuckerberg,” with a straight face, and she let him in!  True story!

My point though – the cheapest unit for sale in that building was $28,000,000 Euros.

The cheapest unit!  Imagine what the other units were going for?

THAT is true wealth.

We think that somebody who owns (or lives in, with a mortgage…) a $3,500,000 house in Rosedale is wealthy, but on the world’s stage, that’s nothing.

To a lot of people on this planet, buying a “high-end” house in Toronto is peanuts.

4) Europe

I suggested among a group of friends last week that “a lot of wealthy Europeans are moving to Canada because of the unstable financial, economic, and political climates,” and the majority disagreed.

But then consider that one of my colleagues who has an “in” with a network of Europeans has already sold two high-end Toronto homes to Europeans who relocated because of exactly those reasons, and I feel somewhat justified.

The European debt crisis may have started back in 2009-10, but people don’t always react right away.  It seems as though some wealthy Europeans “got out,” and that might have involved getting “in” to the Toronto market.

This is a function of the three points above as well; a $4 Million house in Toronto represents the ultra high-end, but that same house in downtown Istanbul might cost triple.

And as for the current situation in Europe?  This is a point that might not be well-received, but don’t shoot the messenger here as I’m merely relaying what I’ve heard in real estate circles.

Whether you call what’s going on in Europe a refugee “crisis” or a refugee “problem,” you do know what’s going on there, right?

Well, there are some very rich Europeans who won’t want their systems to be “dragged down” by the amount of social assistance that will undoubtedly be needed over the next couple decades, and they will look to relocate.

Don’t shoot the messenger!

What we’re seeing in Europe right now is unprecedented in our lifetimes, and the results will be studied and read about fifty years from now.

But let’s be honest at the same time, and admit that just as a corporation might move their headquarters to another country to avoid a higher tax rate, some wealthy Europeans might move to protect their wealth and their way of life.

Again, please don’t think this is my opinion, but rather I’m putting this together from conversations I’ve had with other real estate agents, on the very subject of “high-end real estate.”

It’s a touchy subject, and I know I’ll go to bed shortly wondering, “Should I have written that on my blog?” but it needs to be mentioned as we talk about the future of high-end real estate in Toronto.

I’ve said it before, but let me say it again as it pertains to this topic: Canadian real estate is cheap relative to other countries, and major cities, around the world.

Torontonians lament the lack of affordability, but that’s relative to what houses cost last year, ten years ago, and beyond.

The high-end of Toronto’s real estate market isn’t just moving, it’s actually hot!

And while not every Forest Hill home is purchased by a wealthy man from Singapore that wants to send his daughters to a private school in Canada, not every home is bought by a 40-something couple from Toronto who built their wealth from the ground up, either.

I have to think that foreign investment is playing a role in all this, but I also think that there just aren’t as many high-end homes going up for sale as many of us anticipated.

What are all those Baby-Boomers doing with their 3rd, 4th, 5th, and 6th bedrooms anyways?  How many home-gyms and offices do you need in your 70’s?


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  1. Appraiser says:

    Below is an excerpt from the latest national RBC Economic Forecast regarding Ontario: This might help to explain why the market is so hot in Toronto and why it will likely continue it’s torrid pace.

    “After a disappointing start to the year—when employment rose by just 3,000 from January to April—there were 54,000 net new jobs created between April and August. More importantly, however, is the fact that full-time employment rose by 94,000 (1.7%) in the four months ending August(part-time jobs fell by 40,000 during this interval) or more than double the gain of 42,000 full-time employed persons in the first four months of this year.Full-time employment in Ontario is on pace to increase the most since 2002.”


  2. Appraiser says:

    Apparently those that predicted the “Manhattanization” of Toronto were completely correct.

    1. Fro Jo says:

      I predicted the 1970s-Bronxization of Toronto in 2025.

  3. condodweller says:

    To me, high end is something that is greatly different from the norm, it has special features that you’d never find in an average house, it is in a special location using special materials not found in the average home. Using this definition, the price will also be “special” in that most people would not be able to afford it. If I had to put a starting price on a high-end home I would say at least 5 million but maybe even higher between 5-10 million.

    Monaco is a bad example as it’s a tax haven for the super-rich. What you are paying for there is the postal code or whatever their equivalent is in order to avoid taxes. Someone might buy that condo for 28 million but will most likely save that much on taxes. I heard there are streets on the French border where a place will sell for millions on the Monaco side of the street and a similar place will be a fraction of the price on the other side due to the lack of the Monaco postal code.

    I really don’t see wealthy people leaving Europe on mass as they are not affected by the migrant issue unless the US starts a war over there which I don’t think is likely.

    1. Boris says:

      No way on the European thing. They are coming here in droves.

      I have a couple of Parisian transplant friends in the city that are well connected socially and are well off with good jobs. They tell me that 5, 8, 10 years ago that there were very few Parisians or new French in Toronto, Because of the Islamization of Paris in particular (and then France more generally and Europe in more general terms) there are well to do Parisians flooding to Toronto. Jews across Europe are also flooding to Canada as the Islamization of Europe continues as people of that faith flee other areas in the Middle East partly as a result of ISIS. So yes, it is happening.

      1. condodweller says:

        Europeans have always come to Canada and the US and it’s not about to change. David wrote: “wealthy Europeans are moving to Canada”. Admittedly I have no idea of the numbers involved, however wealthy Europeans are not the ones who are going to be affected by their system “dragged down” by the social assistance required for the migrants. Not to the point where they are forced to leave anyway. It’s the unemployed/underemployed who will be competing for the social assistance $s or Euros. The wealthy will take advantage of the situation and employ the migrants instead of locals for less and will get wealthier. That’s how it has always been throughout history.

        WRT your friends, I don’t consider “well off with good jobs” wealthy. In fact, I think that’s an oxymoron. Except for the exception, and by definition, if you have a “job”, you are not wealthy. Did your friends buy a 3 million house for cash when they got here? Perhaps, but not likely.

        I have family in Europe and what’s happening scares the heck out of me, not because of what the refugees will do, but because of what the US will do. With their scrambled egg policy!

        1. Fro Jo says:

          Executive jobs (not even C-suite) can easily carry a $2.5×10^6 mortgage at today’s rates.

        2. Boris says:

          Wait until high end tax rates surge if and when Trudeau/Mulcair win the election. At the margin this will dissuade capital flows.

        3. Boris says:

          these are guys that make a couple bucks a year.

          THat means a couple mill btw.

          Its happening. Thank ISIS.

  4. Libertarian says:

    If foreigners are buying, doesn’t that mean that there are people selling? Perhaps those sellers have chosen to cash out. I’m curious as to what those sellers did with their windfall.

  5. RPG says:

    David, I found nothing wrong with your comment about the refugee crisis. It’s a valid discussion point, and something people should be more open to talking about.

    Is it possible you’re getting more sensitive as your following continues to explode?

    A lot of us read your work because you never hold back, so please don’t start now!

  6. Kyle says:

    Let’s pause for a moment to do a little reflection. What was that clown Garth Turner and his mindless band of zombies barfing out all over the internet not too long ago? Something to the effect of how the high end market was “moribund”. Or how CMHC not insuring mortgages over 1M has killed the high end market. And how it is much better to cash out of your homes (which has experienced double digit annual returns) and instead invest in the market (which is back to Dec 2010 levels). Seriously how is it possible that people still follow that idiot?

    1. Buckley B Buckington says:


      On pretty much every single article on this blog regardless of the subject, one of the first comments will be you ranting about Garth Turner. It’s starting to sound like you’re a bit obsessed, perhaps it’s time you took up a hobby, perhaps you could sign up for some painting or taekwondo lessons?

      1. Kyle says:


        Translation of what you just said, “Please stop trying to pull my head out of the sand, i prefer the dark comfort of living in delusion”

        Perhaps it’s time you accepted reality.

        1. Boris says:

          no, youre a broken record on Garth Turner. Stop it, enough already. Dont care.

          1. Kyle says:

            Then don’t read it.

        2. Boris says:

          Garth Turner.

          1. crazyegg says:

            Hi All,

            Garth Turner needs to promote equities as he is owns a Financial Advisory company. Regardless, he probably owns real estate indirectly via REITs, mutual funds and ETFs.

            Many people have done well in the past 5 years owning equities; similarly many have done well owning GTA real estate.

            Why not own BOTH?


    2. Kyle says:

      Actually i need to correct myself, the TSX is actually back to Apr 2007 levels. Meaning someone would have been better off stuffing money under a mattress for the last 8 years. At least mattresses don’t charge service fees. So much for the often repeated bear argument about the “opportunity cost” of a down payment.