The performance of Canada’s major luxury real estate markets diverged in the first half of 2023, as some cities experienced a surge in momentum while activity waned in others, according to a new report from Sotheby’s International Realty Canada.
The data shows that despite challenges such as rising mortgage rates, economic uncertainty, and other macroeconomic factors, Canada’s major cities showed varying trends in their real estate performance.
However, local factors such as the availability of housing and the buyers’ attitude played a more important role in each city’s real estate market than national ones.
“The Canadian luxury housing market has remained remarkably resilient despite the headwinds of multiple interest rate hikes and unpredictable economic performance, And the second quarter of 2023 marked a turnaround point for consumer activity,” president and CEO of Sotheby’s International Realty Canada Don Kottick said in a press release on Wednesday.
According to the report, Vancouver saw a remarkable surge in activity in the second quarter and was restored to balanced conditions by the middle of the year. The most significant improvements were seen in the ultra-luxury single-family home market in both consumer sentiment and sales activity.
Looking at the bigger picture, residential sales for properties priced above $10 million saw a 38 per cent year-over-year increase in the first half of 2023 while sales of properties priced between $4 million-plus decreased by 18 per cent.
When it comes to Toronto, the luxury real estate market in this city witnessed a strong resurgence of active and qualified buyers. However, demand for luxury homes surpassed the limited available inventory which led to rapid sales and created a seller’s market for single-family and attached homes until the end of May, before moderating to balanced conditions mid-year.
In the first half of 2023, luxury real estate sales continued to move towards private and exclusive sales and marketing networks in the city of Toronto. As a result, there was a considerable annual decline of 32 per cent in residential sales above $4 million-plus and a 29 per cent decrease in sales above $10 million.
The rest of the Greater Toronto Area experienced an even more significant decline, with a 35 per cent drop in sales above $4 million-plus and a substantial 56 per cent decrease in sales above $10 million.
Montreal’s luxury market continued to moderate in the first half of 2023. Sales of properties priced over $4 million saw a 39 per cent year-over-year decrease while sales of properties priced over $1 million were also down, showing a decline of 28 per cent.
However, the report calls Calgary “one of Canada’s most upbeat luxury real estate markets” as it experienced high demand for luxury housing in the first half of the year due to a rising population and thriving economy. In the same period of time, $1 million-plus residential sales were only 10 per cent below the levels seen the same period in 2022, while condominium sales over $1 million increased 100 per cent.
Reporting for this story was paid for through The Afghan Journalists in Residence Project funded by Meta.
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.
