Photo: E.Zorrilla/Flickr

Luxury condo prices in two of Canada’s major housing markets are going to keep rising this year, a well-known Canadian real estate brokerage is forecasting.

Royal LePage predicts the median price of a luxury condo will rise 5.4 percent over the next year in Toronto and 7.7 percent in Montreal, according to the Royal LePage Luxury Real Estate Report.

Baby Boomers are downsizing, selling large single-family homes for more manageable suites, and this generational shift is fueling demand for luxury condos across the country, says Chris Slightham, a broker and owner of Royal LePage Signature Realty.

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“I’d say it’s a demographic shift of the Baby Boomer generation looking to have a lifestyle change from being in their larger homes,” Slightham tells Livabl. “Maybe they have second homes or would like to travel some more,” he adds.

Royal LePage considers a luxury condo to be one that has a value at least three times the median price of a unit in a local market.

As of last month, the median price of a Toronto luxury condo was $2,268,571, up 10.2 percent from a year prior.

In Montreal, the median luxury condo price was $1,295,401, representing an annual increase of 8.4 percent. A homebuyer’s money will go further in Montreal than Toronto, so that could be attracting some affluent buyers.

“There’s no foreign-buyer tax there, is one possible reason why it’s growing,” says Slightham, offering another possible explanation for the strength in the Montreal market’s numbers. Ottawa, where the median luxury condo price is projected to rise by 3.1 percent this year, has benefitted from this as well.

In summer 2016, BC introduced a 15-percent foreign-homebuyer tax for Metro Vancouver, and Ontario followed suit with its own 15-percent levy the following spring. This year, BC expanded the area where the tax is applicable and also raised it to 20 percent.

Following BC policy moves, which are summed up in a 30-point plan for housing affordability, Vancouver real estate has been correcting — and the top end of the market is no exception. In January, the median price of a Vancouver luxury condo was $2,680,064, down 0.6 percent on a year-over-year basis.

Future declines of 3.7 percent are anticipated over the year to come. “I think it’s housing policy change that is driving it,” says Slightham of the downturn in Vancouver’s luxury market.