Toronto has claimed the title of world’s “hottest” luxury real estate market in 2016, surpassing last year’s number one, Auckland, and a number of high performing Pacific Rim markets. Toronto’s market continued to pick up speed in 2016, marked by falling inventory levels and number of days on market, a record of 17 days, and rapid price increases.
In contrast to the Luxury Index, which evaluates overall prices and relative “luxuriousness” of a market, the Luxury Thermometer rankings evaluate both growth and demand, and answer the elusive question: “Where is the world’s hottest luxury housing market?”
Already-hot prime property market Toronto soared to the top of this year’s Luxury Thermometer rankings, with almost double the number of million-dollar-plus sales recorded versus the previous year. The Canadian city retook the number one spot from Auckland, which dropped to sixth place. Toronto recorded the shortest time to sell a luxury property (17 days on the market, down from 28 days the year prior), fueled by incredibly low inventory and rapid price increases that prompted both buyers and sellers to act. The recent introduction of new taxation measures, including a 15 percent tax on overseas buyer purchases, may begin to cool the city’s red-hot property market in 2017.
Toronto regains title as world's hottest luxury property market:
Toronto was joined atop the rankings by another Canadian city, Victoria, which witnessed its best year ever for luxury home sales. The provincial capital saw a significant uptick from affluent international buyers who were deterred by nearby Vancouver’s new 15 percent tax on overseas purchases and opted for Victoria instead.
Victoria is one of six Pacific Rim markets to rank in our Luxury Thermometer this year. Relatively strong local economies alongside national and overseas migration and capital inflows were key contributors to growth in these “hot” luxury property markets in California, Oregon, British Columbia, Australia, and New Zealand. An influx of affluent Chinese buyers—most notably in Auckland, San Francisco, Portland, and Sydney—accounted for some of the growth in sales, pricing, and absorption rate. Rapidly increasing numbers of wealthy millennial buyers—in Portland and San Francisco, especially—were also key contributors.
New to the Luxury Thermometer this year are three U.S. cities—Austin, Charleston, and San Diego—as well as Paris. The historic city of Charleston is experiencing a resurgent local economy and an influx of millennial buyers at the entry-level luxury price point, with strong growth in sales and prices in 2016. Three of last year’s top ranking “hottest” luxury property markets—Valencia, Costa Smeralda, and Stockholm—all recorded robust results but were overtaken by the outperforming newcomers.