The luxury real estate market shows strong and stable growth in Canada’s major cities.
In Halifax, while there was a 16% reduction in sales exceeding $1 million in Halifax, the average sales price witnessed a 13% increase compared to 2022.
In Montréal, units sold valued at $1 - 3.99 million declined by 12% annually, but average prices remained remarkably stable, shifting down by 0.62%.
In Ottawa, two properties sold for over $6 million, the first time since 2014, driving a 24% increase in average prices for homes over $4 million.
In Toronto, over 50% more sales made over $8 million in 2023 compared to 2019, despite unfavorable market forecasts and the foreign buyer ban.
In Vancouver, the luxury real estate market defied flux in 2023, seeing unyielding stability in $1 - 3.99 million home price averages.
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MARKETS AT A GLANCE
HALIFAX
In 2023, while there was a 16% reduction in sales exceeding $1 million in Halifax, the average sales price witnessed a 13% increase compared to 2022.
The Halifax market experienced a slow pace in 2023, attributed to various factors affecting Canadian markets such as rising interest rates, fuel costs, inflation and recovering from the pandemic’s economic impact. Halifax experienced a remarkable series of natural disasters, including destructive forest fires, record-breaking downpours causing floods and an unprecedented hurricane season. During these periods, buyers and sellers proceeded with caution when making real estate decisions. Nevertheless, the markets surrounding Halifax performed adequately in 2023 due to its well-priced inventory of single-family detached homes. Inside the city’s perimeters, the $700,000 - $1 million and $1 million-plus markets were slow-paced, allowing inventory to rebuild after an extraordinary sales run from 2020 - 2022.
“We are not seeing price declines despite a sluggish market, but negotiations are possible. Price averages continue to trend upward due to supply shortages, and there is a decrease in multiple offers in the $1 million and higher segment. We advise interested buyers to take advantage of the current market conditions.”
- Donna Harding, License Partner, Engel & Völkers Nova Scotia
In 2023, 202 residential homes from $1 - 3.99 million sold, compared to 225 in 2022. Though this number dropped by 10 per cent, average home prices remained remarkably stable, hovering at $1,335,441 in 2023, an increase from $1,302,882 in 2022. The total number of condos sold priced from $1 - 3.99 million was 14, compared to 20 in 2022. The average price in this category was $1,315,741 in 2023, compared to $1,161,337 in 2022. Engel & Völkers predicts a steady real estate market until the expected interest rate cut in spring 2024, foreseeing an increase in listings during this time. Despite Halifax's premium category indicating a seller's market, there's a decline in multiple offers above $1 million, leading buyers to exercise caution and delay purchases until market stability is assured.
MONTRÉAL
Units sold valued at $1 - 3.99 million declined by 12% annually, but average prices remained remarkably stable, shifting down by 0.62%.
In 2023’s second half, Montréal said adieu to overbidding and fast-paced price increases. Indicators show sales peaked in May 2023, aligning with when some buyers began experiencing difficulty qualifying for mortgages. Subsequently, the market dynamics shifted, resulting in an increase in days on market and a decrease in competition for homes.In 2023, the total number of residential homes sold between $1 - 3.99 million was 1,522 compared to 1,742 in 2022, emphasizing the premium markets in Montréal are stable.
“Demand for move-in ready freehold homes is high, with prime inventory often receiving multiple offers within 24 hours of listing. A record number of immigrants continue to move to Québec. Many settle in central areas, and we expect strong market demand through 2030 as they move through the real estate cycle, starting with renting.”
- Patrice Groleau, License Partner, Engel & Völkers Montréal
Twenty eight residential units sold valued at over $4 million, compared to 30 last year. The average price was $3,218,798, decreasing from last year’s average of $5,415,778, likely skewed higher due to a large sale. The total number of condos sold priced over $4 million was eight, compared to 14 in 2022. The average price in this category was $4,942,986 in 2023, compared to $3,656,955 in 2022.In Montréal, the real estate market faces challenges such as rate hikes, labour shortages, construction constraints, and social considerations. Engel & Völkers anticipates a soft stabilization in 2024, emphasizing the significance of these factors in shaping the market's trajectory, steering away from a hard landing.
Ottawa
Two properties sold for over $6 million, the first time since 2014, driving a 24% increase in average prices for homes over $4 million.
Ottawa’s market conditions have gradually shifted, with a growing understanding of the new conditions around buying, selling and property value. The mood was characterized by a wait-and-see approach, with 2022’s market froth entirely dissipating. Previously, buyers and sellers would engage in transactions to pursue gains, but the market in 2023 lacked the urgency that once defined it.
“Ottawa’s adjustment period will continue into spring 2024, but I don’t anticipate dramatic price drops. Buyers will have selection and experience less pressure through the process. Sellers should have strong representation and understand days on market will be longer. They will need seasoned advisors on their team.”
- John King, License Partner, Engel & Völkers Ottawa Central
In 2023, 1,259 residential homes from $1 - 3.99 million sold, compared to 1,592 in 2022. Though this number decreased by 26 per cent, average home prices remained remarkably stable at $1,320,219 in 2023, increasing by one per cent from $1,306,545 in 2022. The average price of condos sold in the $1 - 3.99 million category in 2023 was $1,410,387 compared to $1,441,320 last year, dropping by merely two per cent. The number of units sold in this category was stable, seeing 39 sales in 2023, compared to 38 in 2022.
Engel & Völkers predicts a buyer's market in Ottawa's luxury real estate from January to April, expecting stability and robustness. The forecast suggests that if mortgage rates drop in the spring, buyers' psychology will shift, creating a new sense of comfort in the market.
TORONTO
Over 50% more sales made over $8 million in 2023 compared to 2019, despite unfavorable market forecasts and the foreign buyer ban.
In Toronto, rising interest rates, gas prices, inflation, wars and post-pandemic effects caused market uncertainty, making its future difficult to predict for even the most seasoned economists. Many buyers and sellers opted to sit back and wait rather than make significant decisions.
While this uncertainty may have created the perception the sky is falling, data for premium residential class homes over $1 million in Toronto tells a different story – one of remarkable stability and balance. In 2023, the practice of underpricing and setting an offer date for a home largely disappeared in Toronto, a change all can agree is positive. Dedicated offer dates became the new norm, creating a more level playing field — especially true for homes under $1 million and over $2 million. Inventory needed to be smartly priced to sell, and multiple offers were not typical. Well-located single-family homes listed between $999,999 and $1,300,000 still drew multiple offers.
“We have observed a noticeable change in how homeowners are moving. Instead of buying first, homeowners are now selling first – attributed to growing days on market. Despite this trend, luxury real estate markets have remained remarkably stable, only recording a minor contraction.”
- Anita Springate-Renaud, License Partner, Engel & Völkers Toronto Central
In 2023, 8,120 residential homes valued from $1 - 3.99 million sold, compared to 9,410 in 2022. Though this number dropped by 14 per cent, average home prices held steady, averaging $1,623,367 in 2023, decreasing by 1.5 per cent from $1,646,891 in 2022. The total number of condos sold between $1 - 3.99 million was 1,755, which dropped by 15 per cent compared to 2,058 last year. The average price in this category was $1,406,711 in 2023, compared to $1,400,394 in 2022, decreasing by just 0.5 per cent year-over-year.
“In Q4 2023, we saw renewed interest in new condo launches, attributed to the attractive incentives developers offered. To further encourage buyers to invest in new construction, developers are adopting creative approaches to pique their interest.”
- Patrice Groleau, License Partner, Engel & Völkers Toronto City
As the interest rate environment stabilizes, buyer psychology will change. Engel & Völkers is forecasting prices will rise in the spring in conjunction with expected interest rate reductions in spring 2024. This could lead to the return of multiple offers to key categories.
VANCOUVER
Vancouver’s luxury real estate market defies flux in 2023, seeing unyielding stability in $1 - 3.99 million home price averages.
Vancouver’s luxury real estate landscape experienced a period of relative stasis in 2023, with a lack of inventory and an uncertain economic climate causing many individuals to remain on the sidelines. While 2023’s spring market showed signs of life, characterized by a spike in May, it was relatively stagnant in the year’s second half. During this time, decisions depended on individual circumstances and did not demonstrate clear trends.
“Seek advice from professional market experts who understand they are not in the sales business; they are in the advice business. Their expertise comes in pricing home inventory correctly for a successful buy or profitable sale. Working with the right advisor will help you maximize your transaction and gain in the long run.”
- Andrew Carros, Chief Operating Officer, Engel & Völkers Vancouver
The second half of the year started with 1,064 residential and condo units sold in the $1 - 3.99 million segment in July 2023, compared to 739 in July 2022, increasing by 31 per cent. This also represents a 28 per cent reduction from the yearly high in May 2023. Three of the 44 units sold in the $4 million and higher range that month were condos. This compares with 25 residential class homes and seven condos in July 2022. New listings were also down year-over-year compared to 2022, by 17 per cent for homes from $1 - 3.99 million and 28 per cent for homes over $4 million.
2024 is anticipated to be uncertain, with significant changes expected by the second half of the year, impacting both buyers and sellers in a challenging market. Engel & Völkers is forecasting that by the second half of 2024, buyers and sellers will step out from sidelines and get back to business. This will bring opportunities, but buyers and sellers must have the courage to take some risks based on informed assessments.