A new report has found that Toronto luxury home sales have dropped by 32 per cent in 2023 compared to the same period in 2022.

The report, prepared by Sotheby’s International Realty, says that there were 181 sales of homes over $4 million in the first half of 2023 using the Multiple Listings Service (MLS). Five of those homes sold for more than $10 million, compared to seven the previous year.

Sotheby’s, however, says that a softer real estate market only partly accounts for the decrease.

According to the realtor, buyers have migrated away from Multiple Listings Services (MLS) and are instead choosing to buy more privately, searching for “targeted access” to ultra-high-worth properties

“Luxury and ultra-luxury residential property sales continued to migrate away from the Multiple Listings Service (MLS) to exclusive and private sales and marketing platforms as ultra-high-net-worth sellers increasingly sought confidentiality, as well as targeted access to qualified local and global buyers for their properties,” the report states.

Toronto’s real estate market has faced considerable strain amid repeated increases to the cost of borrowing, though home prices have begun to shoot up in recent months.

The Sotheby’s report notes that sales were down across the board, however the decrease in properties over $1 million in price was more muted, with a 27 per cent drop from the first half of 2022.

The causes behind these dips are unsurprising – according to Sotheby’s, “rising mortgage rates,
economic uncertainty and macroeconomic headwinds” are likely to blame – but changes in the luxury housing market are also regional. While Toronto has experienced a significant decline in luxury home sales, ultra-luxury sales of over $10 million in Vancouver climbed 38 per cent between Jan. 1 and June 30 of this year.

According to report, “inadequate supply” remains an issue in the luxury housing market, which has led to “frustrating” potential sales and undermining the housing needs of locals. Toronto’s market, however, remains the highest-regarded of Canada’s luxury housing markets, called by Sotheby’s “resilient and enduring” despite temporary challenges to the economy.

Moving forward, Sotheby’s anticipates “resilient” luxury home values through the end of 2023, without a significant drop in price tag.