Purchasing a luxury home is a sure investment around the world, especially in Toronto, which has been named the “hottest” luxury real estate market for 2016 by Luxury Defined by Christie’s International Real Estate.

“Interestingly, the world’s fastest-growing and hottest luxury markets are Canadian,” Monique Sofo of Christie’s told Toronto Business Daily.

Ranked second in 2015, Toronto’s rise to first place on the Luxury Thermometer was made all the more impressive by Christie's sale of a luxury property that was only on the market for 17 days, a significant difference from its 2015 record of a 28-day sale.

“This shortage of luxury housing stock has continued to place incredible upward pressure on sales prices,” Sofo said.

There are a number of factors at play in Toronto’s ranking, including low inventory and increases in prices. A new 15 per cent tax on purchases made by overseas buyers is likely to discourage another surge in the Toronto market for this year, as a similar tax in Vancouver has already indicated. The implementation of the tax in Vancouver persuaded a considerable number of people to buy in Victoria, British Columbia, where such a tax did not exist. The result was a ranking of second place for Victoria in 2016 and no ranking for Vancouver.

“Despite these new measures, Toronto will continue to be viewed as one of the most attractive places to invest in residential real estate,” Sofo said.

Using what it calls the Luxury Thermometer, Luxury Defined has assessed not only the demand of a given market but also the growth, which allows it to determine what housing market is the most popular. Last year’s hottest housing market was found in Auckland, which has fallen to sixth place for 2016.

Overall, 2016 was an impressive year for luxury home sales, with a 1 per cent increase in luxury home sales, whereas this year has seen only a 1 per cent increase in the same category.

Toronto's top luxury real estate developers include Concord Adex, The Daniels Corp., Haimish Developments, Tridel, Streetcar and Urban Capital. Companies engaged in luxury development in Toronto include Camrost-Felcorp, Menkes Developments, Mizrahi Developments and Stafford Developments.