Sellers of luxury real estate did well last year, data on the Vancouver market suggests. Sales of properties with price tags higher than $4 million were up a whopping 171 per cent year-over-year.
Data released by Sotheby’s International Realty earlier this week included that 410 such properties were sold in the area in 2021. That total includes condos, attached homes and single-family homes.
It’s a trend that wasn’t limited to Vancouver, too.
Records fell in most of Canada’s major metropolitan luxury markets, something Sotheby’s attributes to buyers’ “urgent, pandemic-influenced demand for housing mobility,” as well as strengthened confidence in Canada’s post-pandemic economic recovery.
As in non-luxury markets, demand quickly outpaced supply. Prices went up, inventory “eroded,” and markets reached historic highs, Sotheby’s report explains simply.
“Canada’s real estate market was redefined in 2021,” Sotheby’s said.
The luxury market benefitted from a change in priorities – with more people working from home, buyers were less concerned about their commutes, and more concerned about space and security.
Low interest rates and record savings also didn’t hurt, and Sotheby’s noted seeing underlying anxiety from buyers concerned about investments made elsewhere, like on the stock market.
In Vancouver, that translated to the increase mentioned above for all luxury properties.
Sales jumped even more from 2020 to 2021 when looking at the ultra-luxury listings. Twenty-four properties priced over $10 million were sold last year, up 218 per cent from just 11 sold the year before.
The report does not address the buyers of homes at this price range, so it’s unclear whether they were purchased by residents already living locally, and whether they were purchased by people intending to live there full time.
A report released last week from the Bank of Canada suggested a significant share of newer homes, at least, were purchased by repeat buyers and investors.
Of course it’s unlikely many first-time buyers are looking at luxury real estate, but the report found that as home sales grew and prices skyrocketed – a trend realtor groups often tied to local buyers looking for more space during the pandemic – it was purchases by investors that grew the most.
The Bank of Canada study looked only at mortgage data, however, so it does not capture homes bought with cash or by corporations.
Looking at lower-priced (relatively) homes, Sotheby’s said broadening the scope to include all properties sold for prices higher than $1 million still shows an increase in 2021, compared to 2020. But sales were up 145 per cent, compared to in the higher-priced categories.
Sotheby’s said 5,794 homes in this category were sold last year.
The category that saw the steepest growth was specifically single-family homes priced higher than $10 million. Those sales were up 240 per cent, compared to the previous year’s.
Other markets saw steep growth when it came to the sale of luxury real estate last year, including in Toronto where sales of properties over $4 million was up 224 per cent from in 2020, and ultra-luxury property sales were up 238 per cent.
Calgary saw the greatest growth in sales over $1 million, which were up 222 per cent, and in Montreal, real estate listed at over $4 million was up 178 per cent from 2020.
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.
