Luxury real estate sales have increased across the country in the first two months of the year but larger markets like Toronto are seeing less activity as some buyers look elsewhere amid steep prices, a new report has found.

While the GTA saw a 14 per cent increase year-over-year in luxury sales, the region is lagging significantly behind markets like Calgary, Montreal and Saskatoon, which all saw an increase of more than 50 per cent, a RE/MAX report on luxury home sales reported on Tuesday.

The report found that lower prices in mid-size markets are fueling the 50 per cent boost in sales of luxury properties by drawing in buyers from overpriced provinces such as Ontario and B.C.

“Affordability is key. The luxury price point in Toronto is much greater than the other cities,” Re/Max Canada president Christopher Alexander told CTV News Toronto, adding that people are moving away from bigger more expensive cities in order to afford luxury living elsewhere.

“Ontario alone last year have had 60,000 people migrate … in the hopes of greater affordability.”

He added that while sellers are hoping to get COVID-era values for their properties, buyers are holding out looking for bargains.

“There seems to be a kind if stalemate between luxury sellers and luxury buyers,” Alexander said. “My agents are telling me that there’s a lot of lowballs happing from prospective buyers but sellers are desperate to hold onto their property hoping the market returns.”

“And so sales have declined.”

Alexander added that tax implications in larger cities are also weighing down the market.

The GTA did see a jump in sales compared to this time last year. The GTA saw 167 sales of homes worth $3 million in the first two months of the year, a 14 per cent jump from last year during the same time period.

Home sales over the $5-million mark saw the highest increase in sales in GTA. Thirty-two freehold and condominium properties were sold between January 1 and February 29 this year, up 77 per cent from the 18 sales reported during the same period in 2023.

Activity remained slow in homes priced between $3 million and $4 million in Toronto with some communities, including Leaside and the Beaches with only three and four listings, respectively.

“Sales are up but it’s not that much … We are still playing a bit of a catch up here,” Alexander said. “But, it’s certainly rebounding and that’s a good thing.”

“A healthy luxury market is the sign that usually the first signs of a healthy overall market. I'm certainly encouraged.”

Ottawa is the only region in the report that saw a decline in luxury sales from a year ago. Alexander said that RE/MAX agents have reported that it could be due to the upcoming federal election.

Many buyers, largely government workers, do not want to purchase luxury properties in the city until the election plays out, he said.