Vancouver and Toronto may face a shortage of luxury housing, but Calgary’s luxury market is flourishing, according to a recent report from Sotheby’s
Luxury real estate sales in Canada experienced a slow start to 2023 due to the supply shortage affecting markets across the country, according to Sotheby’s International Realty Canada’s Top-Tier Real Estate: Spring 2023 State of Luxury Report.
This trend affected all segments of the market, leading to buyers and sellers delaying their activity to the second quarter, despite strong consumer confidence and demand.
Luxury property listings trickling into Vancouver and Toronto
Luxury property listings gradually trickled into the Vancouver market in the first quarter of 2023, while Toronto faced a shortage of luxury housing supply. This deflated the aspirations of potential homebuyers and depressed total luxury sales volume in the GTA.
Luxury sales in the region over $4 million were down 64 per cent year-over-year. Overall, $1 million-plus residential sales were down 57 per cent year-over-year in the GTA. One property sold over $10 million on MLS, compared to eight ultra-luxury residences sold above this price point in the same period last year.
In Vancouver, luxury real estate sales over $4 million were down 53 per cent year-over-year, while four properties sold over $10 million on MLS compared to five in the same period last year. Sales volume over $1 million contracted 51 per cent year-over-year, “a consequence of the city’s pervasive shortage of housing across the luxury and conventional market,” the report states.
Calgary’s luxury real estate market continues to be active
In contrast to Vancouver and Toronto, Calgary’s luxury real estate market flourished in Q1 2023, as economic growth, positive consumer sentiment, and record in-migration fueled activity in the city.
Residential sales volume over $1 million was 223 per cent higher than in the pre-pandemic first quarter of 2020 and well above the city’s 10-year average for luxury sales.
Although sales over $1 million pulled back by 36 per cent year-over-year while the $4 million-plus market remained quiet, Calgary’s luxury sales were facilitated by the city’s favourable housing supply ratio in relation to demand.
In Montreal, the market had tapered to more balanced conditions by the end of 2022, and although sales volume over $4 million declined by three per cent year-over-year in Q1 2023, the market saw moderating prices and increased competition for limited inventory in the city’s most prestigious neighbourhood.
Demand expected to intensify
Don Kottick, President and CEO of Sotheby’s International Realty Canada, said there has been a build-up of demand for housing across Canada’s conventional and luxury real estate market over the past few years.
Kottick adds, “A significant cohort of prospective home buyers and sellers who were reluctant to make a move in 2022 have now adjusted their expectations to new market norms and are now pre-qualified, highly motivated and anxious to find a home that meets their needs and lifestyle.”
Prospective buyers’ biggest challenge is the “sheer lack” of supply across the market. Kottick says.
“This shortage is placing a chokehold on real estate markets that would otherwise be primed for healthy activity and will mean that properties priced appropriately for the market will see qualified interest and uptake in the coming months.” points and housing types.
Find the full report here, including a detailed look at the country’s largest markets.