The report issued Wednesday said buyers and sellers retreated from the luxury market in 2022 as the housing market responded to challenges like interest rate hikes, high inflation and regulatory challenges, setting the stage for prices to cool this year amid continued demand for housing.
Dan Kottick, president and CEO of Sotheby’s International Realty Canada, said luxury housing segments in some Canadian metropolitan areas were either approaching or already in buyer’s market conditions by the end of 2022, and he predicted another “important adjustment” on pricing on the horizon in the coming months.
“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,” Kottick said in a written statement.
“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.”
Sotheby’s report found luxury sales fell year-over-year in major Canadian cities. In the Greater Toronto Area, residential real estate sales over $4 million fell nearly a quarter from 2021 to 2022, and sales over $10 million fell 29 per cent.
Vancouver also saw a sharp decline in high-end real estate sales, particularly in the first quarter of the year, with residential sales over $4 million falling by 30 per cent by the end of 2022. Residential sales over $10 million fell 46 per cent from 2021 levels.
The report said Montreal’s luxury real estate market “tempered to more balanced conditions” over the course of last year, with residential sales over $4 million close to 2021 levels and an 18 per cent annual decline in sales activity for homes over $1 million.
Calgary was an outlier that outperformed other metropolitan areas and saw sales of homes over $1 million rise 16 per cent from 2021 to 2022. Sales over $4 million grow 50 per cent, the report said, with six properties sold in that price range. The report said the city’s strong economy “ignited consumer confidence” while interprovincial migration contributed to growing demand for housing.
Kottick noted that housing deficits will continue to challenge housing markets in major cities in 2023, and while prices are expected to go down, pent-up demand and immigration population gains “will continue to support housing values in the long term.”
New policies aimed at limiting foreign participation in the housing market “will have a negligible effect on affordability” and have confuse d prospective new Canadians, he added.
TORONTO – One expert predicts Ottawa‘s changes to mortgage rules will help spur demand among potential homebuyers but says policies aimed at driving new supply are needed to address the “core issues” facing the market.
The federal government’s changes, set to come into force mid-December, include a higher price cap for insured mortgages to allow more people to qualify for a mortgage with less than a 20 per cent down payment.
The government will also expand its 30-year mortgage amortization to include first-time homebuyers buying any type of home, as well as anybody buying a newly built home.
CIBC Capital Markets deputy chief economist Benjamin Tal calls it a “significant” move likely to accelerate the recovery of the housing market, a process already underway as interest rates have begun to fall.
However, he says in a note that policymakers should aim to “prevent that from becoming too much of a good thing” through policies geared toward the supply side.
Tal says the main issue is the lack of supply available to respond to Canada’s rapidly increasing population, particularly in major cities.
This report by The Canadian Press was first published Sept. 17,2024.
OTTAWA – The Canadian Real Estate Association says the number of homes sold in August fell compared with a year ago as the market remained largely stuck in a holding pattern despite borrowing costs beginning to come down.
The association says the number of homes sold in August fell 2.1 per cent compared with the same month last year.
On a seasonally adjusted month-over-month basis, national home sales edged up 1.3 per cent from July.
CREA senior economist Shaun Cathcart says that with forecasts of lower interest rates throughout the rest of this year and into 2025, “it makes sense that prospective buyers might continue to hold off for improved affordability, especially since prices are still well behaved in most of the country.”
The national average sale price for August amounted to $649,100, a 0.1 per cent increase compared with a year earlier.
The number of newly listed properties was up 1.1 per cent month-over-month.
This report by The Canadian Press was first published Sept. 16, 2024.
MONTREAL – Two Quebec real estate brokers are facing fines and years-long suspensions for submitting bogus offers on homes to drive up prices during the COVID-19 pandemic.
Christine Girouard has been suspended for 14 years and her business partner, Jonathan Dauphinais-Fortin, has been suspended for nine years after Quebec’s authority of real estate brokerage found they used fake bids to get buyers to raise their offers.
Girouard is a well-known broker who previously starred on a Quebec reality show that follows top real estate agents in the province.
She is facing a fine of $50,000, while Dauphinais-Fortin has been fined $10,000.
The two brokers were suspended in May 2023 after La Presse published an article about their practices.
One buyer ended up paying $40,000 more than his initial offer in 2022 after Girouard and Dauphinais-Fortin concocted a second bid on the house he wanted to buy.
This report by The Canadian Press was first published Sept. 11, 2024.
