Despite economic uncertainties and a cooling housing market, Toronto’s $1 million-plus home segment remains active. Properties in this price range, once a hallmark of the city’s booming real estate market, have experienced some softening in prices over the past year. However, they continue to attract a diverse group of buyers, from high-income professionals to international investors, who remain committed to purchasing in one of the world’s most sought-after cities. This article will examine the key drivers behind this market and identify who is still buying homes priced over $1 million in 2024.
A Look at the Numbers: Price Trends in the $1M+ Segment
As of September 2024, the average price of a detached home in the Greater Toronto Area (GTA) was $1,333,394, representing a 2.4% year-over-year decline. In Toronto’s core, the average price of detached homes remained higher at $1,423,056, a 1.7% drop compared to September 2023. These price reductions, while notable, are more moderate compared to the sharper declines seen in other segments, such as condos and townhouses.
Homes over $1 million remain a substantial portion of the GTA market. In particular, semi-detached homes and luxury condos in desirable neighborhoods still often sell in this price range, even as buyers in lower-priced segments enjoy more negotiating power. Jason Mercer, Chief Market Analyst at the Toronto Regional Real Estate Board (TRREB), noted that “while we have seen some moderation in prices, high-value properties continue to perform relatively well, driven by consistent demand from higher-income households“.
Who’s Still Buying in the $1M+ Market?
Despite the price adjustments, Toronto’s $1 million-plus market continues to attract a variety of buyers. Let’s explore the main demographics still purchasing homes at this price point:
- High-Income Professionals: One of the largest groups purchasing homes over $1 million remains high-income professionals—those working in fields such as finance, law, and technology. These individuals and families typically have the financial stability to afford larger down payments and higher monthly mortgage payments, even in a more uncertain market environment. Many are drawn to Toronto’s central neighborhoods, where proximity to work, lifestyle amenities, and reputable schools remain important factors.
- Move-Up Buyers: Another significant group is move-up buyers, who are upgrading from smaller homes or condos to larger detached or semi-detached properties. These buyers are often families who have built equity in their previous homes and are now in a position to afford a larger property in a more desirable area. With lower interest rates in 2024, many move-up buyers have seized the opportunity to purchase homes that were previously out of reach. The Bank of Canada’s prime rate of 6.5% in September 2024 has allowed buyers to take on larger mortgages with more manageable monthly payments.
- International Investors: While foreign buyer activity has slowed in recent years due to tighter regulations and taxes, international investors still play a role in Toronto’s high-end real estate market. Many are drawn to the city’s reputation for economic stability, cultural diversity, and strong long-term growth prospects. Luxury condos in downtown Toronto, priced over $1 million, continue to attract interest from overseas buyers, particularly those from China, the Middle East, and Europe, looking for safe, long-term investments.
- Affluent Downsizers: Another growing segment of the $1 million-plus market is affluent downsizers—empty nesters and retirees who are selling larger homes in the suburbs and moving to more convenient, central locations. Many of these buyers are seeking smaller, low-maintenance properties, such as luxury condos or townhomes, often priced at or above $1 million. Downsizers are particularly interested in properties that offer amenities, security, and walkability, aligning with their desire for an active, urban lifestyle.
The Impact of Lower Interest Rates on the High-End Market
One of the most important factors sustaining the $1 million-plus market is the lower interest rates introduced by the Bank of Canada in 2024. With borrowing costs reduced, high-income buyers have been able to secure more favorable mortgage terms, even for high-value properties. These lower rates have made it easier for buyers to finance homes over $1 million without exceeding their monthly budget constraints.
Additionally, changes to mortgage lending guidelines, such as longer amortization periods and the ability to insure mortgages over $1 million, have helped many buyers qualify for larger loans. These changes have been especially beneficial for move-up buyers, who are looking to upgrade but still require mortgage financing. The combined effect of lower interest rates and more flexible mortgage terms has allowed more buyers to enter the $1 million-plus market, supporting continued demand for high-value homes.
Regional Variations in the $1M+ Market
While homes over $1 million remain a common feature of the GTA market, there are regional variations in demand and price performance. For example, downtown Toronto and its surrounding neighborhoods continue to see strong demand for properties in the $1 million-plus range, driven by the city’s high concentration of professionals and affluent buyers.
In contrast, some areas of the 905 region have seen more significant price adjustments. Detached homes in the 905 area averaged $1,333,394 in September 2024, down 2.4% from the previous year. These declines reflect broader trends in suburban markets, where the increase in new listings and changing buyer preferences have led to more competition and softer prices.
However, certain luxury markets in the 905 region, such as Oakville and Richmond Hill, continue to attract high-end buyers, particularly families and international investors. These areas offer large, upscale homes with expansive lots, making them desirable for those seeking more space and privacy without sacrificing access to urban amenities.
The Role of New Listings in Shaping the $1M+ Market
The rise in new listings has also played a significant role in the dynamics of the $1 million-plus market. In September 2024, new listings across the GTA increased by 10.5% compared to the same period in 2023, with 18,089 new listings compared to 16,377 in the previous year. This influx of inventory has given buyers more options and reduced some of the upward pressure on prices.
In the $1 million-plus market, this increase in listings has been most noticeable in the luxury condo and detached home segments. With more properties available, buyers have more negotiating power, and sellers are having to price their homes more competitively. This has led to longer days on market (DOM) for high-value properties, with the average time to sell a home increasing to 30 days in September 2024, up from 27 days in the previous year.
Conclusion: Who’s Still Buying and What Lies Ahead?
Despite some price softening, the $1 million-plus market in Toronto remains active, driven by high-income professionals, move-up buyers, international investors, and affluent downsizers. These buyers continue to see value in Toronto’s real estate market, with lower interest rates and flexible mortgage lending guidelines playing a key role in maintaining demand.
However, the market is not without its challenges. Rising new listings and changing buyer preferences have created a more competitive environment for sellers, particularly in the detached home and luxury condo segments. As the market continues to evolve, the $1 million-plus segment is expected to remain resilient, supported by strong demand from both domestic and international buyers.
Looking ahead, the key to the future of the $1 million market will be how economic conditions, interest rates, and inventory levels develop. For now, though, Toronto’s high-end real estate market continues to attract a diverse range of buyers who are willing to invest in one of Canada’s most prestigious cities.
