With all the ups and downs that have influenced housing markets in the last four and a half years, the luxury homes segment experienced fewer peaks and valleys, with sales rising in almost all major cities in Canada, with the exception of the two most expensive markets, Vancouver and Toronto, according to the 2024 Royal LePage Carriage Trade Luxury Market Report.“Homes typically trade hands at the high end of the market at a slower pace than we see in the industry overall, as the funnel of potential purchasers narrows as the price of properties climbs,” says Phil Soper, president and chief executive officer at Royal LePage. “While market conditions can vary from one city or province to the next, the dynamics at play in luxury real estate markets from coast to coast remain consistent: buyers in this segment know what they want and they are willing to wait for it.” Calgary and Edmonton recorded some of the largest gains in sales year over year in the first eight months of 2024, due to strong demand from out-of-province buyers, says the report, adding brisk activity is expected in the fall market. “Luxury buyers typically have the means to be picky. Their home buying decisions are shaped by more than the desire to live in a particular neighbourhood,” says Soper. “Often, their decision whether to buy or not is driven by their confidence in the health of the overall economy and the direction they see housing prices headed. Our research shows those in the higher end of the housing market have a very positive outlook on the long-term stability and appreciation potential of Canada’s housing stock.“ “Many buyers in the luxury market segment do not require high-leverage mortgages, in fact, it is common to see expensive homes purchased with very substantial down payments, or even fully in cash. Thus, luxury homebuyers as a rule are not as heavily impacted by high interest rates as the average consumer.” Regional summaries Calgary The entry-level price of a luxury property in Calgary is $1,750,000, with the median price holding relatively steady at $2,143,000 from January to August 2024. During that time, sales increased 30.9%. “Throughout the pandemic, many of our luxury clients felt a sense of uncertainty and chose to hold off on their purchase plans. We started to see a return to the market in 2023, with further pick up this spring,” said John Hripko, sales representative, Royal LePage Benchmark. “Some buyers are taking their time, possibly looking for a deal. When a luxury property sits on the market, some people expect that the seller will get desperate and drop the price eventually, but this is rare. Most sellers in this segment view this transaction as more of a business decision.” “Calgary continues to see a number of people relocating from other major Canadian cities, knowing they can get a luxury product for a better price here, one that has a larger lot yet is still in close proximity to the downtown core. Neighbourhoods like Mount Royal and Elbow Park are of particular interest.” Edmonton The entry-level price of a luxury property in Edmonton is $1,250,000, while the median price over the first eight months of 2024 was $1,589,900, with sales increasing 39.7%. “Luxury home sales in Edmonton have been on an upswing this past year, particularly at the entry-level end of the price scale. Recently, listings have begun to dwindle slightly, as is typical for this time of year as school goes back in session, which has created a positive shift for active sellers who are seeing increased demand and more showings for the fewer number of available properties,” said Ed Lastiwka, associate broker, Royal LePage Noralta Real Estate. “This is likely to put upward pressure on prices in the coming months as motivated buyers look to make a purchase before colder weather sets in.” “There appears to be two primary luxury buyer types in Edmonton: those who prefer to completely rebuild in more central locations closer to downtown, such as the city’s River Valley neighbourhood,” said Lastiwka. “Another subset of luxury buyers will look to the outer-city’s newer communities where the land value tends to be less, where they can find a suitable property or build the house of their dreams from scratch.” Vancouver The entry-level price of a luxury property in Vancouver is $5,500,000, while the median price hovered around $6,975,000, a 1.8% decrease year-over-year, while sales in the segment fell 38.8%. “In Vancouver’s luxury segment, it seems everyone is trying to time the bottom of the market. As such, we’ve seen a slowdown in activity of late,” said Jesse Dean Cook, sales representative, Royal LePage Sussex. “Some buyers are expecting prices to drop and are holding out for a deal. But, given the current shortage of luxury housing inventory, price discounts are not materializing.” “Lower interest rates have done little to motivate activity in this market, which is dominated by buyers who do not typically require financing. Instead, interest rates are used as a temperature check for the overall health of the national and global economies, which have been unsteady these past few years.” TORONTO The entry-level price of a luxury property in Toronto is $4,750,000, while the median price between January and August increased 3.9% to $5,820,000. During the same period, sales activity decreased 5%. “Toronto’s luxury market had a soft start to the year as the introduction of the updated municipal land transfer tax came into effect on January 1st. The amended tax saw graduated increases on properties valued over $3,000,000, starting at 3.5% and moving upwards,” said Gillian Oxley, sales representative, Royal LePage Real Estate Services Oxley Real Estate. “This led to a slower-than-normal spring market, which caused our inventory of available homes for sale to increase.” “Given current market conditions, it’s no surprise that many buyers are looking for deals and we have seen clients getting into the luxury market at a lower threshold,” said Oxley. “Currently, buyers are prepared to be more patient when looking for the right home.” Oxley expects Toronto’s luxury market will see stronger levels of activity in the fall and improved market conditions in the spring, as lowered interest rates and economic stability lend to higher consumer confidence.
