Canada’s luxury market was not immune to the downturn that hit Canada’s real estate market in 2022. 

According to recent data released by Sotheby’s International Realty Canada, luxury sales in Vancouver, Toronto, and Montreal experienced a decline in activity last year; Alberta was the only outlier. 

“By the end of the year, luxury housing segments in several major metropolitan areas were on the brink of buyers’ market conditions, while others had very clearly shifted into this territory,” says Don Kottick, president and CEO of Sotheby’s International Realty Canada. 

Market highlights

Calgary

Calgary’s luxury real estate market outperformed Canada’s largest major metropolitan areas, as a strong economy and interprovincial migration lifted demand for the city’s conventional and top-tier housing. 

As a result, the city’s luxury market rebounded in 2022, and sales over $1 million rose 16 per cent year-over-year from 2021 levels. Sales over $4 million increased 50 per cent to six properties sold. 

The $1 million-plus single-family and attached homes sales saw 12 per cent and 68 per cent annual sales gains, respectively, while condo sales over $1 million experienced a significant increase of 79 per cent year-over-year (YoY).

Greater Toronto Area 

Luxury sales activity in the Greater Toronto Area receded through 2022, falling 24 per cent YoY, and ultra-luxury sales over $10 million declining 29 per cent. 

Sales of condos, attached and single-family homes over $4 million fell 29 per cent, 25 per cent and 23 per cent YoY, respectively. 

Overall, $1 million-plus residential sales saw an annual decline of 28 per cent, despite underlying demand for top-tier housing and housing mobility.

Vancouver

Vancouver’s luxury real estate market experienced a sharp decline in sales activity following the year’s first quarter. Sotheby’s attributes the pause in activity to prospective buyers, frustrated by an era of heated market conditions, waiting for more favourable opportunities.

Sales of over $4 million and $10 million were down 30 per cent and 46 per cent, respectively. Condo sales over $4 million remained stable with a nominal three per cent year-over-year uptick, while attached home sales declined 73 per cent. 

The city’s $4 million-plus single-family home saw sales decrease 32 per cent year-over-year, while ultra-luxury single-family home sales over $10 million fell 46 per cent. 

Overall, residential real estate sales over $1 million were down 29 per cent in 2022 from the city’s record sales volume in 2021.

Montreal

Montreal’s luxury real estate market remained more stable, with a modest two per cent YoY uptick in sales over $4 million. In comparison, sales activity in the $1 million-plus category experienced an 18 per cent annual decline. 

Overall, $1 million-plus single-family home sales were down 22 per cent year-over-year, while attached home and condo sales over $1 million fell 23 per cent and five per cent, respectively.

The year ahead

Kottick says, “The market is now on the verge of another important adjustment, this time in terms of pricing. It has taken several months for home sellers to realize the impact of the changing market on the market values of their properties. 

“As new property listings come onto the market in 2023, their pricing will shift to meet current realities. This will start to unlock long-awaited opportunities for buyers and upsizers to purchase homes that meet their lifestyle needs as they acclimatize to the market.”

According to Kottick, a fundamental housing deficit across every property type and price category will continue to challenge major metropolitan housing markets, particularly Vancouver and Toronto. 

Although housing prices are expected to adjust downward to realistic market norms in several major metropolitan areas, pent-up demand for housing mobility, as well as anticipated population gains from immigration, will continue to support housing values in the long term.

Canada’s foreign buyer ban that came into force Jan. 1, 2023, as well as demand-side policies and taxes, will have a negligible effect on affordability, according to Kottick, and have primarily served to confuse and frustrate not only prospective new Canadians but law-abiding real estate agents.

Read Sotheby’s Top-Tier Real Estate Report: 2022 Year in Review here. 

REM Editorial Team