Condos are leading Toronto’s rising luxury real estate market, which is expected to make further gains this year thanks to a low supply of listings and the return of foreign buyers, according to a Royal LePage report released Tuesday.

Luxury condo prices climbed 7 per cent in the GTA in the 12 months ending Jan. 31, to a median price of $2.4 million. By comparison, high end houses, rose only 1.2 per cent to $3.6 million in the same period.

But Steven Green, a sales representative with Royal LePage Partners Realty, said he expects this year will see another jump in prices. He is predicting luxury condos to rise between 10 and 15 per cent in the next 12 months and houses to surge between 2.5 and 6 per cent.

The lack of new listings has continued to drive up prices this month, said Green. As an example, he cited a case last week where six competing offers drove the selling price of a condo near Yonge Street and Lawrence Avenue up by 36 per cent beyond asking.

“There’s no supply, so there’s five people looking to buy the same kind of product right now because they had no chance of buying this one,” he said.

Green, who has several Hollywood names among his clientele, says Toronto’s luxury market is being fuelled by the return of foreign buyers since last summer.

Property buyers from Asia and the U.S. are attracted by the city’s vibrant culture and relative safety, and have adjusted to the non-resident buyers tax introduced in 2017. Prices also came down in some areas such as Bayview Avenue and York Mills Road

“They look at real estate differently than we do. We always wanted to buy a house on the quiet street. They have changed the market and pricing for some areas because they want to be buying on the major street or close to the major street because they want the action,” he said.

Prices look high to Torontonians but Green said, “We’re still undervalued for major cities around the world.”

Empty nesters are typically looking for condos in their old neighbourhoods. Condos sell in Toronto for about $1,000 per square foot, he said. Many buyers are purchasing less square footage than they might actually like but they are purchasing for the area.

“So many people are looking for 1,800 sq. ft.-plus and that’s hard to find,” said Green.

Many of those are in Yorkville, the St. Regis at Bay and Adelaide streets and the Ritz on Wellington St. W.

Among Canada’s major cities, Montreal saw the highest year-over-year price appreciation in its luxury market in the year leading to Jan. 31 with 8.5 per cent for both houses and condos. A dearth of listings is also pushing prices there, with homeowners hesitating to list for fear of not being able to find another suitable property, said Royal Lepage. The company is forecasting the median price of luxury homes there to grow by 5.5 per cent for houses and 5 per cent for condos.

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The Toronto Regional Real Estate Board is predicting average Toronto home prices will rise by 10 per cent overall this year, including all houses and condos. Last year the average selling price of a resale home was 12 per cent higher year over year than 2018.

Royal LePage’s uses median home values in its different markets, in addition to company data and analytics from its sister company, RPS Real Property Solutions.

The report is based on GTA houses priced at about $3.15 million and up and condos valued at $1.7 million and higher. In Montreal, the luxury designation applies to houses costing about $1.3 million or more and condos at or above about $1.05 million.