Posthaste: The luxury housing market in Canada has undergone a major change
Canada’s luxury housing market has bounced back in recent months, but it’s also undergone a major change: the country’s four biggest markets can no longer be painted with the same broad brush.
Activity sprang to life in the luxury real estate market as a whole in the second quarter, with buyers and sellers re-engaging after waiting on the sidelines amid the Bank of Canada’s aggressive interest rate hiking campaign, according to Sotheby’s International Realty Canada’s mid-year report on the state of the market. But the market has diverged in major cities as local influences such as migration, supply and buyer intentions weigh heavily on individual markets.
Luxury housing has entered a new era, the report said, and performance trends based on national averages no longer apply to all regions, even as cities face similar challenges from interest rate increases — which have boosted mortgage rates — and uncertainty over the economy.
“The second quarter of 2023 marked a turnaround point for consumer activity,” Don Kottick, chief executive of Sotheby’s Canada said in a news release. “At the same time, Canadian luxury market performance has started to diverge, at times unpredictably, between major cities, neighbourhoods and housing types.”
In Vancouver, for example, buyers flooded back to the market and ultra-luxury sales of residences above $10 million grew significantly in the first half of the year, spiking 38 per cent from a year earlier. Sotheby’s said activity was driven by a greater transfer in wealth between generations, consumer confidence and wealth planning. As a whole, the market returned to more balanced conditions, even as a shortage of supply and higher mortgage rates muted sales in some categories. Sales of houses
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