The end of the COVID-19 pandemic is nigh and Canada’s luxury real estate market is riding the resulting wave of optimism, says a new report from Sotheby’s International Realty Canada.
Canada’s GDP in Q1 grew by 5.6%, according to the Bank of Canada, while the Conference Board of Canada anticipates 6.1% expansion of real GDP for the year, with every province expected to recover economically from the pandemic. Sotheby’s has attributed these propitious economic conditions to declining inventory in the country’s major luxury real estate markets during the first half of the year.
The Greater Toronto Area’s luxury market outperformed all others in the country during H1-2021, with sales over $4 million surging by 276% year-over-year. Fifteen of the transactions are considered “ultra luxury properties,” meaning they sold for over $10 million—an increase of 114% over the first half of 2020. Luxury condo sales increased by 88%, while attached and single-family home sales rose by 400% and 290%, respectively. Sales for homes over $1 million also surged by 217% year-over-year during the first half of the year, with Sotheby’s noting that sellers bested buyers.
In Vancouver, the luxury market reached a fever pitch with sales over $4 million increasing by 152% year-over-year in H1-2021, and sales in the $10 million-plus category exploding by 300%. Although the city’s luxury condominium market experienced the same pandemic-induced lull as the Toronto and Montreal markets, the $4 million-plus category had a strong spring during which sales surged by 138%. Single-family homes in the same price range rose by 152% while attached home sales increased by 300%. Vancouver’s bottom-tier luxury market (sales over $1 million) also increased by 107% in H1-2021 compared to the first six months of 2020.
Montreal’s $4 million-plus residential market saw sales increase by 133% in the first half of this year compared to H1-2020, with Sotheby’s indicating that it picked up from its red-hot pre-pandemic pace and cemented Montreal’s place among the world’s top luxury real estate destinations. Single-family sales in Montreal worth over $4 million surged by 160% year-over-year in the first half of the year, while real estate sales of homes over $1 million increased by 112%. The first half of the year also saw the sale of a condominium listed at $12.9 million by Sotheby’s International Realty Quebec.
In Calgary, sales in the $1 million-plus residential category increased by 236% year-over-year in H1-2021, but the distribution among housing types was lopsided, Sotheby’s said. The city’s single-family and attached markets saw sales rise by 230% and 338%, respectively, and while luxury condo sales rose by 350%, there were only nine transactions.
In the report, Sotheby’s president and CEO stated that the pandemic established space as an imperative among homebuyers in a way never seen before.
“We expect this to have a lasting impact across many facets of the Canadian luxury real estate market,” said Don Kottick. “Perhaps most profoundly, there has been a major shift in the psychology of luxury real estate consumers and homeowners. The new reality is that as the perceived value of living space has increased, affluent buyers’ ‘willingness to pay’ for luxury real estate has increased exponentially. Affluent consumers are more prepared to invest in additional space and in next-level architecture and design, whether through upsizing, home renovations or home building. This is elevating the quality and pricing of housing in Canada’s most prestigious neighbourhoods, in many cases, permanently.”