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Transformation in Canada’s luxury real estate market: Sotheby’s 2023 recap and outlook for year ahead

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On Wednesday, in its Top Tier Report: 2023 Year in Review, Sotheby’s released its findings on last year and comparisons of different home types in Canada’s major metropolitan markets.

Throughout 2023, Canada’s metropolitan luxury real estate market witnessed a shift in buyer behavior and negotiating power amid various challenges. Despite economic shocks, interest rate hikes and regulatory changes affecting overall sales, affluent buyers displayed resilience and strategic engagement. The end of 2023 revealed softening prices in major metropolitan markets, increased inventory and favorable conditions for buyers, setting the stage for strategic sales in early 2024.

Here’s how the country’s main luxury markets performed.

 

Greater Toronto Area (GTA)

 

Luxury sales in the GTA remained steady as high-end buyers strategically positioned themselves. While overall residential sales over $4 million saw a 20 per cent decline, ultra-luxury sales over $10 million remained stable with a 5 per cent shortfall. Single-family home sales over $4 million were down 22 per cent, and attached homes and condominiums had respective gains of 8 per cent and 10 per cent.

 

Vancouver

 

Vancouver’s luxury market saw a notable shift, with single-family homes gaining prominence. Residential sales over $4 million came in 8 per cent higher than 2022 levels, and sales over $10 million experienced a significant 43 per cent annual jump.

However, overall residential sales over $1 million were 5 per cent under 2022 levels, and declines of over 30 per cent in luxury condominium and attached home sales over $4 million were experienced.

 

Montreal

 

Montreal’s luxury market experienced uneven activity throughout 2023, with a summer uptick followed by a more balanced market. Sales over $4 million saw a 22 per cent annual decline, and overall residential sales over $1 million fell 14 per cent. Single-family and attached home sales over $1 million fell 14 per cent and 6 per cent, respectively, and condominium sales over $1 million declined by 21 per cent.

 

Calgary

 

Calgary’s luxury market outperformed other major metropolitan areas, driven by more affordable prices, strong economic prospects and job gains.

Residential sales over $1 million increased by 13 per cent year-over-year, and sales over $4 million increased as well. Single-family and attached home sales over $1 million had 12 per cent and 14 per cent annual gains, respectively, and condominium sales over $1 million saw a 26 per cent increase.

 

More options, better negotiating power, less competition for 2024 buyers

 

“In the aftermath of an era marked by soaring housing prices across Canada’s largest cities, the conventional and luxury real estate market continues to shift towards a period of opportunity for home buyers and investors,” says Don Kottick, president and CEO of Sotheby’s International Realty Canada.

“While prices remained resilient in the country’s most prestigious neighbourhoods for the better part of 2023, those areas in which new property listings began to accumulate are now seeing softening prices, and a greater willingness from sellers to adjust to market realities. Meanwhile, prospective luxury property buyers and investors have been strategically preparing for the right opportunity.”

Kottick continues, “As properties are listed by motivated sellers in early 2024, buyers will have more options, considerable negotiating power and will face less competition than in years past. This is a window of opportunity for luxury buyers and ‘up-sizers’ to purchase a home to meet their lifestyle and investment needs before interest rates fall, competition stiffens and the market swings in the opposite direction.”

 

Read the full report here.

 


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