Prices in luxury home markets in Canada’s four largest cities have taken a beating to start 2023, compared to the halcyon first three months of 2022..Homes priced at $1 million or more saw declines averaging 46% in Calgary, Vancouver, Toronto and Montreal, according to the latest luxury real estate report from Sotheby’s International Realty Canada..Sotheby’s says the precipitous drop is due to “a shortage of housing supply across every spectrum of the market” which compelled “real estate sellers and buyers to delay market engagement to the second quarter.”.“Prices have stabilized across Canada’s luxury and conventional real estate market despite the build-up of consumer demand,” says Don Kottick, president and CEO of Sotheby’s International Realty Canada..“In light of elevated interest rates and carrying costs, prospective buyers and investors are discerning, strategic and unwilling to bid up properties beyond current market values.”.As with all levels of housing, the luxury market suffers from a shortage of homes for sale..“This shortage is placing a choke-hold on real estate markets that would otherwise be primed for healthy activity and will mean that properties priced appropriately for the market will see qualified interest and uptake in the coming months,” says Kottick..Market Highlights from Sotheby’s.Calgary.“Dynamic economic growth, positive consumer sentiment and record in-migration into the Calgary metropolitan area continued to fuel activity in the city’s conventional and luxury real estate market in the first quarter of 2023,” says Sotheby’s. .“Residential sales over $1 million pulled back by 36% year-over-year but were above the city’s 10-year average for luxury sales.” .“In stark comparison to the muted sales activity in inventory-starved Toronto and Vancouver, Calgary luxury sales were facilitated by the city’s comparatively favourable ratio of housing supply in relation to demand.”.According to the Calgary Real Estate Board’s report of March statistics, the number of $1 million-plus sales in March 2022 was 197 homes; March 2023’s number was 136 homes. Year-to-date to the end of March 2022, there had been 420 million-dollar-plus sales; to the end of March 2023, that number dropped to 246 sales..Vancouver.“As luxury property listings gradually trickled into the Vancouver market in the first quarter of 2023, prospective home buyers continued to await fresh inventory in the spring. As a result, luxury residential sales over $4 million pulled back 53% year-over-year,” says Sotheby’s.“Four properties sold over $10 million on MLS compared to five sold in the first quarter of last year. Despite intensifying demand for housing mobility, residential sales volume over $1 million contracted 51% year-over-year overall during this time, a consequence of the city’s pervasive shortage of housing across the luxury and conventional market.”.Toronto.According to Sotheby’s International Realty Canada’s Top-Tier Real Estate: Spring 2023 State of Luxury Report, “a shortage of luxury housing supply in the City of Toronto deflated the aspirations of potential home purchasers, and depressed total luxury sales volume across the Greater Toronto Area in the first quarter of 2023.” .“As a result, GTA luxury residential real estate sales over $4 million (condominiums, attached and single-family homes) between January 1 – March 31 were down 64% year-over-year from the first quarter of 2022.”.“During this time, one property sold over $10 million on MLS, compared to eight ultra-luxury residences sold above this price point in the same period last year. Overall, $1 million-plus residential sales were down 57% year-over-year in the GTA, foreshadowing a competitive market for appropriately priced and well-appointed luxury properties this spring.”.Montréal.“Montreal’s luxury residential real estate market, which had tapered to more balanced conditions by the end of 2022, saw sales volume over $4 million declining 33% year-over-year in the first quarter of 2023 in a market that saw moderating prices, an increase in offers submitted with conditions, while also enduring competition for limited inventory in the city’s most prestigious neighbourhoods,” says Sotheby’s..“Overall, Montreal residential real estate sales over $1 million between January 1– March 31 were down 43% year-over-year.”
