Engel & Völkers is excited to share its 2020 Year-End Canadian Luxury Real Estate Market Report. The report combines market data with intel from Engel & Völkers’ local market experts to forecast residential real estate trends in Canadian markets. Homes priced from $1 to $4 million and $4 million-plus as listed in the Multiple Listing Service (MLS) were evaluated throughout the year with forecasts based on homes priced over $1 million. The result is a residential property and market report for Montréal, Ottawa, Toronto, and Vancouver analyzing the unprecedented year of 2020, with a keen focus on what we deem as a market to watch: Victoria.
Historically, spring is the busiest season for home buying and selling in Canada. Lockdown orders in March sent a freeze through the market, putting activity in Canada’s major metropolitan centres on pause. Overall, spring activity was not lost, only delayed. As the curve flattened, interest in real estate, notably luxury real estate, climbed. The year was characterized by record-high market activity in Canada’s metropolitan centres, suburbs, and recreational markets from July – December.
“From coast to coast, Canada experienced unprecedented levels of domestic home trading across the country. With borders closed, Canadian real estate proved it’s built on solid fundamentals. As it relates to home value, there is no question both fiscally and in sentiment, it’s never been greater in the Canadian market.”Anthony Hitt
President & CEO, Engel & Völkers Americas
Real estate transactions in cottage country experienced an unprecedented boom, seeing laid-back markets experience city-like market conditions and multiple offer situations. As lockdowns were announced, buyers quickly searched for a place to wait out the pandemic. Many luxury buyers who regularly travel traded in their trips for secluded recreational properties and good old-fashioned Canadiana. Some made permanent moves to the country, realizing they can have it both ways and work remotely. This trend was hot in 2020, but Engel & Völkers is forecasting that while some may stay in the country, many will return to metro areas, drawn in by the desire of dining out, entertainment, museums, and culture. Upon resuming these activities, Canada’s metropolitan areas will see a resurgence to pre-pandemic levels of development.
Montréal earns status as most pandemic resilient metropolitan market. Engel & Völkers is projecting a price rise of 10.5% in 2021.
Montréal’s high-end market soared in 2020, earning it the status of the most pandemic resilient metropolitan market. In Montréal, year-over-year sales volume grew by 32 percent, and prices rose by 21 percent for all homes. Total listings were down by 16 percent. In the $4 million-plus category, move-in ready homes with contemporary design finishes sold within approximately one week, while homes requiring upgrades remained on the market for a longer period of time.
Lack of travel and the rise of working from home is fueling extraordinary sales in Montréal’s cottage country and suburbs, respectively. In both areas, prices have soared while inventory has dwindled. However, the longevity of this trend remains to be seen. While the condo market saw an overall slowdown, prices grew year-over-year and an increase in demand is anticipated in 2021. Engel & Völkers Montréal is predicting a boomerang effect back to cities once they reopen. Many who made a move to cottage country or the suburbs will miss living in the heart of the city and will be drawn back to the cities’ culture, entertainment, and convenience.
Record $10 billion worth of property sold in Ottawa in 2020. Engel & Völkers is projecting a price rise of 15% in 2021.
In 2020, Ottawa saw a record amount of property sold. Year-over-year, prices grew by a tremendous 10.4 percent for homes priced $4 million-plus. The year was characterized by unprecedented activity through December, with multiple offer situations occurring on Christmas Eve and New Year’s Eve – as reported by Engel & Völkers Ottawa Central. The most significant shift in the market as a result of COVID is the demand for more space. People are moving out of condos and migrating to the suburbs and rural areas, a broad trend in the industry. Suburban homes in Kanata, Orleans, and Barrhaven, traditionally remaining on the market for extended lengths of time, grew exponentially in price within a short period.
By November, the overall average sales price for residential property increased by 25 percent year-over-year to $603,253, a remarkable gain. Demand is consistent and sustained across the market. Lower price points are driving prices higher across the entire market as buyers face competition and bidding wars. Engel & Völkers is projecting a price rise of 15 percent n 2021.
Limited buying opportunity in Toronto’s condo market. Engel & Völkers is projecting a price rise of 5% in 2021.
A busier than usual January helped Toronto begin 2020 with a sizzle. February saw the highest number of new home sales since 2002. Before March’s lockdown, 2020 was projected to be a record-breaker for real estate sales in Toronto. Despite lockdowns, Toronto’s market continued to grow. By year-end, 95,151 sales were reported – up by 8.4 percent compared to 2019. The month of December was especially notable, recording 7,180 sales – a year-over-year increase of 64.5 percent. The average selling price for all home types in December was $932,222, an 11.2 percent increase year-over-year.
While luxury inventory in Toronto remained limited, the standard detached market from $1 million to $4 million had a heavyweight year, particularly in sought after neighbourhoods. Interest in outlying areas of the city grew as restaurants, entertainment and office-life quickly faded away. With a rise in demand for detached and semi-detached homes rose, came a decline in demand for condos, and as the pandemic unfolded, demand in cottage country spiked to unprecedented levels usually reserved for downtown Toronto. Engel & Völkers Toronto is predicting market prices will increase by 5 percent in 2021. The condo market is offering a brief buying opportunity, and buyers on the sidelines shouldn’t hesitate to jump in while sellers are willing to negotiate.
Vancouver market driven by locals looking to move down, move up or move out. Engel & Völkers is projecting a price rise of 5% in 2021.
Vancouver’s 2020 market was characterized by locals looking to level up. Indeed, the number of units sold above $4 million consistently grew throughout the year. October saw the year’s high, with a significant 61 units sold in this category. As people stayed home, they reevaluated their spatial needs in the context of the new normal. Keeping in step with people who upsized, there were many who decided they wanted to maintain less space and downsize, and invest their savings in a second property or hold on to their savings. Some cashed in their urban property and headed for a recreational market permanently. While the appeal to live in an urban condo has mostly dissipated, prices held through year-end driven by buyers who saw an opportunity to enter the market at an affordable rate. Buyers will save more by taking advantage of lower interest rates rather than delaying purchases and hoping for a price drop, as condo stock is still limited in the market.
Engel & Völkers is forecasting prices will increase by 5 percent in 2021 as the market moves at an unhurried pace.
MARKET TO WATCH
Sales volume in the $4 million-plus category grew by more than 500%. Engel & Völkers projecting a price rise of 8% in 2021.
Low COVID case counts and island-living have driven phenomenal growth in Victoria’s luxury real estate market. The market is experiencing exponential growth despite the pandemic, finishing 2020 with one of the best years on record. Buyers flocking to Victoria are seeking properties with acreage where they can live undisturbed in isolation, surrounded by natural beauty. Waterfront sales volume doubled through the year, with homes of rarity and prestige commanding the highest prices.
“The market has been nothing short of insane as it relates to volume, prices, and speed in which we are selling properties since restrictions were lifted. Domestic buyers from across Canada are coming to Victoria to seek ownership of considerably large homes with acreage quickly.”James LeBlanc and Scott Piercy
Engel & Völkers Victoria
Low-interest rates coupled with Victoria’s livability have created prime seller’s market conditions. In fact, sales volume in the $4 million-plus category grew by more than 500 percent. Compared to other Canadian cities, Victoria is still relatively underpriced. Those purchasing now can do so knowing there will be price growth of around 8 percent according to Engel & Völkers’ forecast.
Find the full version of the report below.