Demand for high-end homes expected to increase in 2024 according to a new report
Challenging market conditions did not stop Canada’s ultra-luxury real estate sector from thriving in 2023, although some markets did better than others.
A new report from global luxury real estate firm Engel & Völkers reveals continued high demand for high-end homes ($1m+) across Canada’s metropolitan markets with expectation that lower interest rates will add greater momentum in 2024.
Toronto led the way with were 31 homes that sold for over $8 million in 2023, more than double the 15 that sold above that price bracket in pre-pandemic 2019 even though market forecasts were unfavourable and there was a curb on wealthy foreign buyers as the Prohibition on the Purchase of Residential Property by Non-Canadians Act came into effect on January 1, 2023.
Luxury real estate markets in Halifax, Montréal, Ottawa, Toronto, and Vancouver all showed stability and resilience despite buyer confidence being weakened by high interest rates and continued geopolitical issues.
With the anticipation of the BoC cutting rates as soon as the spring, 2024 should see a return to buyer confidence in the luxury segment.
"Looking ahead to 2024, Canada's real estate markets are poised for a dynamic year as buyers and sellers adeptly navigate the evolving conditions,” commented Anthony Hitt, president and CEO of Engel & Völkers Americas. “We are optimistic that the latter half of 2024 holds promise for sellers. The Bank of Canada is expected to marginally reduce interest rates, set to trigger clustered demand, fostering competitive conditions. The good news is after years of precariously low inventory, the past 12 months have seen a build-up, and it will be there to meet demand.”
Across the markets
Digging deeper into the high-demand metros across Canada:
- Halifax saw a 16% reduction in sales exceeding $1 million in 2023. Despite this, the average sales price witnessed a 13% increase compared to 2022.
- Montréal's units sold valued at $1 - 3.99 million declined by 12% annually, but average prices remained remarkably stable, shifting down by just 0.62%.
- Ottawa saw two properties sold for over $6 million, the first time since 2014, driving a 24% increase in average prices for homes over $4 million.
- Toronto's ultra-luxury market saw over 50% more sales above $8 million, compared to 2019, despite unfavourable market forecasts and the foreign buyer ban.
- Vancouver's luxury real estate market defied flux in 2023, seeing unyielding stability in $1 - 3.99 million home price averages.
