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Luxury real estate markets in Canada saw divergent performance in the first half of 2023: report

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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.

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