How Did The “High End” Market Finish 2015?

And how has the high-end market performed, relative to the overall market in Toronto?

Let’s take a look back at the last five years in Toronto, specifically those houses over $3,000,000.

Since the NFL Playoffs are now upon us, and there is no “Sunday Night Football” on NBC, I suppose I’ll spend that 3 1/2 hours sifting through data instead…


Raise your hand if you don’t like Monday mornings?

And raise your hand if you feel less-than-fantastic today?

Well, I have good news for you: it could be worse.

You could be Blair Walsh, the field goal kicker on the Minnesota Vikings who missed a 27-yard field goal to win the game for the Vikings, who were underdogs to the powerhouse Seattle Seahawks.

Sure, those of you that saw the game, and know football well, will point out that the “holder” (yes, that’s a position on a football team…) neglected to rotate the ball so the laces were out, rather than in, and thus he could be blamed moreso for the missed field goal.

But it was twenty-seven yards!  Blair Walsh should have been able to make that kick even if the laces reached out and grabbed him, like tentacles on an octopus…

If this sounds familiar, and you’re not a football fan, it’s because Jim Carey dealt with this subject in “Ace Ventura: Pet Detective” over two decades ago:


Remember this clip?

So there you have it.

Today is a good day because you are not Blair Walsh.

Then again, today is not a good day because you’re going to spend the next ten minutes reading about houses you can’t afford…

Last week, the National Post ran an article called, “Forget The $1M Home, The Hottest Part Of The Housing Market Is $4M Plus.”

Well, if “thirty is the new twenty,” as they say about age, then perhaps $4 Million is the new $3 Million.

Until now, it would seem, we have always used $3 Million as the threshold for the “high-end” market.  So is this National Post article signifying the changing of the guard?  Or is it simply one article, focused on one segment?

The article explains that in Vancouver, sales of $4 Million homes are up 65% year-over-year.  But the average home price in Vancouver is a whopping 47% higher than the average home price in Toronto (using November stats from CREA), so perhaps their $4 Million is like our $3 Million.  Or something like that…

So today, I want to take a look at statistics for houses in Toronto, selling over $3,000,000, in the last three years.

Now before I begin, I want to make a point about data.

The more you have of it, the truer the conclusions you may draw.

If our sample size is low, then the fluctuations can be massive.

And in Toronto, where you’re looking at 300 houses, at best, there’s going to be fluctuations.

So I’m going to use a number of different metrics in attempt to compare the last three years, and draw conclusions about the $3,000,000 market.

Now before I get to the $3,000,000 market, let’s quickly look at the $2,000,000 market.

Here are the number of homes that sold in Toronto, over $2,000,000, over the last five years, and the respective increases in parenthesis:

2015 – 1,023 (+36%)
2014 – 755 (+43%)
2013 – 529 (+19%)
2012 – 446 (+7%)
2011 – 418

And while we’re at it, and just because I’m damn curious myself, let’s do the same for houses over $1,000,000:

2015 – 5,019 (+29%)
2014 – 3,893 (+31%)
2013 – 2,966 (+12%)
2012 – 2,646 (+15%)
2011 – 2,296

The only strange piece of data I see here is that the increase in $1 Million house sales fell from +15% to +12% in 2013, and in the same year, the increase in $2 Million house sales rose from +7% to +19%.

But again, we’re not dealing with massive sample sizes here, so perhaps there’s no conclusion to be drawn.

In any event, let’s look at the $3,000,000 market.

First, total sales:

2015 – 315 (+74%)
2014 – 181 (+27%)
2013 – 143 (+36%)
2012 – 105 (-9%)
2011 – 115

The increase in total sales from 2014 to 2015 is absolutely shocking.

Recall that the National Post article said sales of $4 Million homes in Vancouver was up 65% in 2015, and the number in Toronto is even more staggering.

There’s a long-standing theory that the higher-priced homes don’t increase in value nearly as much, because there are fewer people buying them.

The market average might tell you one thing, but that average is made up of condos at $250,000, and houses at $11,000,000.

So with that in mind, let’s look at the pricing data.

First, let’s get a refresher on the average Toronto home price over the last five years:

2015 – $622,217 (+9.8%)
2014 – $566,624 (+8.3%)
2013 – $522,958 (+5.2%)
2012 – $497,130 (+6.9%)
2011 – $465,014

Average sale price:

2015 – $4,151,598 (+3.6%)
2014 – $4,007,319 (-4.1%)
2013 – $4,179,533 (+2.6%)
2012 – $4,075,559 (-0.2%)
2011 – $4,083,606

Again, this is the average of as few as 105 properties.

So the sample size might be too small to really get a good picture on the average increase in value of this segment of the market.

If the average home price in Toronto in 2014 increased by 8.3%, I would find it hard to believe that houses over $3,000,000 somehow decreased in value by 4.1%.

Median sale price:

2015 – $3,612,500 (+1.8%)
2014 – $3,550,000 (-2.7%)
2013 – $3,650,000 (-0.9%)
2012 – $3,685,000 (+3.1%)
2011 – $3,575,000

Now we start to see how perhaps a small sample size makes a true picture tough.

The median sale price rose in 2012 by 3.1%, but the average sale price dropped by 0.2%.

The median sale price dropped in 2013 by 0.9%, but the average sale price rose by 2.6%.

2014 and 2015 tell the same story, but in the previous years, the picture gets a bit cloudy.

Of all these numbers, I believe that the “total unit sales” is the one most people would favour, bull or bear.

As I said, the “averages” don’t give us enough clarity on the situation.  But you can’t argue with the number of unit sales, and to see the total number of sales of $3,000,000 houses skyrocket by 74% when sales of $1 Million+ and $2 Million+ homes have only increased 29% and 36% respectively is jaw-dropping.

Any ideas as to the “why” in this situation?

I have a few…

1) Price increases

I think it’s fair to say that if prices are increasing, then so too are the number of homes over any given threshold.  The average price of a home in Toronto went up 9.8% last year.  So, on average, a $2,700,000 house is now worth over $3,000,000.

More properties “join the club” each year, as prices continue to rise.

2) Supply

It takes two to tango.

In order for their to be more sales, there have to be more homes listed for sale.

Many will point to the downsizing of the Baby Boomers as a reason why more high-end homes are hitting the market, and I wouldn’t disagree.   But then how do you explain the increase in demand?

3) Demand

The proportion of houses to condos is shrinking massively as our city expands, and houses are becoming more and more rare.

But the “high-end” homes are even more of a rarity.

You can build 500 condos in the sky, any time you’d like.  There’s no shortage of sky in Toronto.

Land on the ground is rare, and unless you’re taking a wide, 50-foot bungalow and tearing it down to make two 25-foot detached homes, or building ten townhouses on the site of an old auto garage, we’re seeing very few new homes being built.

But in the “high-end,” were not seeing any new homes being built.  There are no “new” homes in Rosedale or Forest Hill, and that has to be driving demand.

4) Foreign Buyers

Yes, I know, we always blame the mysterious “foreign buyer.”

But I have colleagues who specialize in all three of Leaside, Rosedale, and Forest Hill, and all three tell me that they have never seen foreign buyers snapping up homes like they did in 2015.

A $4,000,000 house in Rosedale or Forest Hill might cost $20,000,000 in comparable neighbourhoods in major cities around the world.  Perhaps $4 Million is chump change to some folks on the other side of both oceans…

5) Societal Changes

Is it possible that more people with money want to be in areas where there are only people with money?

Is the desire for exclusivity higher in 2016 than it’s ever been?


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  1. Appraiser says:

    @Mike: Comparing per capita numbers in a major city to an entire country is ridiculous. In any case, a miilion is still a great deal more than zero. Nice try.

    1. Appraiser says:


      P.S. The per capita number of Realtors in the U.S. is HIGHER than Canada.

      What was your point again?

  2. Wut says:

    Walsh has already made 4 million USD by 26 years old and is guaranteed another 2. I think I could deal with missing a kick.

  3. Boris says:

    Blair Walsh always kicks laces, in. It’s a known thing, he prefers it.

  4. Paully says:

    The total supply available of high-end properties has to factor in to the equation. For example, take a look at just about any block in Willowdale and you will see at least two new rebuild homes in various states of completion. Those monsters are ultimately going to sell for around $2M – $3M. They are replacing old bungalows and 1.5 stories that are selling for around $1M+.

    The total number of larger, newer, higher-priced homes is increasing every day. The volume of transactions has to increase simply based on the higher availability of homes in that price range. If there was a way to account for the overall increasing supply in the higher price brackets, it would make your numbers more meaningful.

  5. Kyle says:

    These are pretty illuminating stats. Interesting to see that the high end is becoming so active. It would also be interesting to look at how the $/sq ft (though i don’t think data exists) has changed instead of looking at the changes by price segment. I think what we’re seeing is an overall sophistication of the market and buyers increasingly willing to pay more $/sq ft for higher end finishes in ground oriented dwellings.

    I’ve noticed it isn’t just the Rosedale, Forest Hill and Annex activity that’s pushing into new price segments. I’m seeing many more $2M+ sales for houses (including semi’s) in neighbourhoods like Riverdale, Little Italy, High Park, Playter Estates, Beaches. This is definitely new territory for many of these hoods. Overall it seems houses in the core with top end finishes go for around $800 – $1000/ sq ft these days.

    1. Mike says:

      Price per sq/ft wouldn’t really work because it doesn’t take land size into consideration.

      Perhaps in South Lawrence park where a lot is considered 75X150 but even then you run into issues were NY lots are more valuable than Toronto proper lots. Then Forest Hill is a different beast where houses only sell for land value unless it’s a brand new build.

      1. Kyle says:

        You make a good point on the land value. Though the idea of looking at $/sq ft, isn’t necessarily for it to “work” in all cases. I’m suggesting it as another dimension to analyze prices to see what factors drive the market and to see what types of things people are paying premiums for and how much.

        1. Mike says:

          Do you mean like how much more someone would pay for a house with a Wolfe range vs, something like a Kenmore?

          I built a model a while back that compared square footage of the house and the lot size but it was only so useful. You can measure out quantitative but qualitative becomes difficult. You can have two house side-by-side, same square footage, same lot size, even same built date but different finishes and you will see almost the same price.

          I think it’s more of a factor in condo’s because they’re almost exactly the same and you can literally go across the street to find something exactly the same.

          If what your looking for is a statistic kept and published by one of the Real Estate Authority, forget it, it will never happen. If you had information on what a house should sell for based on previous sales then there really wouldn’t be a need for agents.

          1. Kyle says:

            I know the stats aren’t out there for houses as i said in my original comment, but if they were they would be useful in honing a feel for the qualitative. That said one can still develop a feel for qualitative factors by watching the market closely. In my experience, this does not negate the use of a good Agent, it actually very much compliments the use of a good Agent.

            Trends that i’ve seen in the City’s core:

            – The spread between gutters vs move-in ready vs completely “done” houses (i’m not just talking about a stove) generally grows as interest rates get lower.

            – Location is no longer just defined by cachet, but by commuting times, schools, proximity to transit and walkability.

            – Buyers are more sophisticated and willing to pay a much larger premium for better/honest architecture, cohesive design and quality work. They aren’t just looking for “newness” or certain finishes anymore.

            – Neighbourhood prices expand in non-linear ways. (i.e. they can be dormant for years until a few sales peak eyebrows and then they explode).

          2. Appraiser says:

            @ Mike:

            The U.S has had previous sales data available for years through websites like Zillow and yet the National Association of REALTORS®’ total membership for December 2015 month end is 1,167,595.


          3. Mike says:

            @ Kyle I find that looking at lot value in the area helps then figure out what it would cost to build an equivalent home. Basic home that’s not a tear down $200 sq/ft and then go up depending on finishes.

            @ Appraiser US has a population of 318mm so that works out to 0.0036 agents per capita. The GTA has a population of 6mm and 40,000 licensed real estate agents for a per capita number of 0.0066. Almost twice as many.