Hey Toronto, really rich people really like you!
If the first-class lounges at Pearson are looking more crowded these days, it’s not just the flow of recently-traded Leafs’ players making their way out of town. In its annual Wealth Report, real estate consultancy Knight Frank ranks Toronto among the most appealing cities for the world’s mega-rich.
The report puts Toronto at No. 12, behind predictable leaders London and New York, but ahead of major capitals such as Berlin and Washington D.C.
“’Follow the money’” was the sage advice from the Watergate mole, and it holds true at the top of our rankings,” says the report, which tracks numbers of ultra-high net worth individuals (UHNWI) that choose to live in each city.
The UHNWI (and yes, this is a real term) are folks with net worth of at least US$30 million, says Knight Frank. These are the people who wander through a 14-room mansion in Rosedale shaking their heads at the lack of space and shabby surroundings.
Evidently 1,216 of these folks are parking their limos in Toronto right now, which is well behind the 4,364 in London, but ahead of the 534 in Montreal and the 262 doing their best to pump up Vancouver home prices.
The study notes that Asian cities are rapidly rising, and should begin replacing North American and European cities in the top rankings.
But Toronto seems to have its own momentum.
Luxury real estate
The city’s real estate board said this week that average prices for detached homes in the city surpassed C$1 million, and of course the Toronto topped a recent list by the Economist on best cities to live in the world.
And Sotheby’s says in a separate study, also out on Thursday, that Toronto will lead Canada’s luxury real estate market this spring, driven by tight housing inventory as well as by strong international demand.
“That’s kind of the basis for our existence,” says Ross McCredie, CEO of Sotheby’s Canadian arm.
“Toronto and Vancouver are definitely international cities for high net worth individuals. Canada is seen as a very stable economy and very safe environment,” he says.
Of course, the subtext of all this is that the overall numbers of ultra-rich are growing fast, thus controlling more assets, and more of the oxygen available to people who make money selling these assets (read: realtors and wealth managers).
Canada ranks even higher on Knight Frank’s ‘big spenders’ index, which tracks expected growth in luxury purchases. Canada’s comes in fourth, behind the UK, China, and Qatar.
Of course, if you’re not expecting to join these ranks, or at least sell a house to them, this might not move the needle for you.
For what it’s worth, though, McCredie says the influx of wealth does trickle down and pump up the value of properties lower on the food chain.
“There’s very much a ripple effect when you see a lot of people buying upscale expensive homes or building new expensive homes. It’s a very strong indicator for the economy,” he says.
So, another feather in the cap for Toronto-boosters, and maybe another reason for first-time home buyers to start pulling their hair out right about now.
