Photo: Michael Gil/Flickr
The Greater Toronto Area (GTA) is expected to lead Canada in luxury real estate market activity this spring, while the nation’s former hottest market, Vancouver, is anticipated to return to normal levels, according to Sotheby’s International Realty Canada release published today.
Sotheby’s, a brokerage and real estate marketing firm for high-end homes, compiled data and analyzed Canada’s largest luxury housing markets (GTA, Vancouver, Calgary and Montreal) to predict spring performance.
The GTA’s (Durham, Halton, Peel, Toronto and York) sales volume, pace and pricing of $4 million-plus real estate is anticipated to top previous years’ record-breaking performances, according to Sotheby’s.
“The Toronto real estate market has pulled into a league of its own, and we expect to see all-star performances across every luxury segment — single family and attached homes, as well as unprecedented performance in the luxury condominium market,” said Brad Henderson, President and CEO of Sotheby’s International Realty Canada.
“At the same time, rising Canadian consumer optimism will add positive colour to the markets in Vancouver, Calgary and Montreal in the coming months,” he adds.
Sotheby’s says Canadian luxury real estate is expected to face “unprecedented levels of uncertainty” this spring, as key factors such as a strong economy, a declining national unemployment rate, the low Canadian dollar and policy changes implemented by all levels of government could cause an impact.
Despite uncertainty at the national level, local market factors such as inventory levels, regional economic and job indicators and consumer confidence will continue as the primary factors influencing high-end market performance this spring, says Sotheby’s.
Of Canada’s four major markets, the GTA saw the greatest year-over-year gains in condo, attached and single family home sales over $1 million in January and February 2017. The brokerage says this foreshadows record-breaking levels for the region’s luxury market this spring.
In the first two months of the year, total home sales over $1 million across the GTA soared 87 per cent, while sales in the City of Toronto increased 44 per cent.
During the same period, luxury real estate sales over $4 million climbed 144 per cent year-over-year in the GTA while the City of Toronto saw an increase of 147 per cent.
This spring, the GTA’s high-end condo market is expected to achieve significant gains, as early 2017 condo sales volume over $1 million has already surpassed 2016 levels by 104 per cent, with 167 units sold.
In January and February 2017, GTA single family homes over $1 million saw 86 per cent year-over-year gains in sales volume, with 2,876 units sold. Sotheby’s expects this segment of the market will maintain this momentum into the spring.
In the first two months of the year, $4 million-plus single family home sales volume rose 158 per cent year-over-year to 62 units sold. Sotheby’s expects sales activity in the spring will surpass these gains.
Following the luxury boom in 2016, Vancouver’s high-end market is expected to normalize this spring.
Slower top-tier sales in Vancouver at the beginning of 2017 signal a shift to more normal levels of market activity, says Sotheby’s.
In January and February, Vancouver sales over $1 million dropped by 45 per cent year-over-year from historic highs, while sales over $4 million also decreased 68 per cent.
During this time, single-family-home sales over $1 million fell 56 per cent to 296 units sold compared to the same period last year.
Luxury single family homes over $4 million also dropped in the first two months of the year, decreasing 71 per cent year-over-year to 35 units sold compared to 120 units sold during the same period in 2016.
Sales activity for Calgary’s top-tier real estate market has stabilized heading into spring, which suggests cautious optimism going forward, says Sotheby’s.
However, Sotheby’s notes consumer confidence is weak, as the city’s real estate market remains vulnerable to uncertainty in the oil and gas sector, higher unemployment rates, wage impacts and population outflow.
In the first two months of 2017, 64 properties sold over $1 million in Calgary, unchanged from the same period in 2016.
Healthy gains are expected this spring for Montreal’s $1 million-plus real estate market, as the first two months of 2017 saw a modest year-over-year increase in sales volume.
The city saw 88 sales over $1 million in January and February up 13 per cent compared to the same period in 2016.