Sotheby’s International Realty Canada’s latest report forecasts strengthening demand for residential real estate over $1 million in Toronto and Vancouver into the fall, including building momentum in luxury sales over $4 million, reinforcing both cities’ positions as international market leaders in top-tier real estate.
The 2015 Fall Forecast analyzes Canada’s largest metropolitan real estate markets and examination of key macro-economic indicators.
Sales of units over $1 million (condominiums, attached and detached single family) increased 56%, 48%, and 20% year-over-year in the Greater Toronto Area (GTA), Vancouver, and Montreal markets respectively, while sales volume decreased 36% in Calgary. At the same time, luxury real estate sales in the $2-4 million and $4 million-plus ranges surged 52% and 71% in Vancouver, and 46% and 72% in the GTA.
- The Bank of Canada’s September 2015 decision to hold the key overnight interest rate at 0.5% will continue to have a positive impact on real estate sales over $1 million.
- In most major metropolitan markets, the contraction in the Canadian economy during the first part of the year, and speculation that growth may weaken has not affected consumer confidence in the $1 million-plus real estate market.
- The demand for single-family homes over $1 million in the GTA and Vancouver is expected to remain high, outstripping available inventory.
- There’s limited supply in the single family home market. As a result, demand for condominiums and attached homes over $1 million is expected to remain strong in the Greater Toronto Area and Vancouver.
- International demand for top-tier real estate in Canada’s major cities is expected to remain high as volatility in global stock markets and a faltering Chinese economy results in a continued influx of buyers, particularly from mainland China.
- The upcoming federal election is not expected to impact the $1 million-plus real estate market heading into fall 2015.
Vancouver Market Highlights:
- Vancouver’s $1 million-plus real estate market is expected to continue to trend upward in fall 2015.
- Limited inventory, strong consumer demand, low interest rates and international buyers will continue to drive favourable seller conditions, multiple offers and sales above list prices in the fall.
- Detached single family home market is expected to lead gains in sales volume and pricing, particularly in the $2-4 million and $4 million-plus luxury segments, while the performance of the attached home and condo markets will remain strong.
- Limited supply in traditional luxury neighbourhoods will propel buyers into neighbourhoods east and south.
Calgary Market Highlights:
- After several years of record-breaking sales, Calgary’s high-end sector experienced a downturn in the first half 2015 as the market absorbed the effects of declining oil prices and a dip in consumer confidence.
- The performance of Calgary’s top-tier real estate market inextricably tied to the state of the oil and gas industry, local employment and net-migration, and with economic volatility and job losses anticipated in the coming months, real estate sales over $1 million are projected to slow in fall 2015 as absorption rates continue to decline.
Toronto Market Highlights:
- The GTA (Durhan, Halton, Peel, Toronto, and York) is expected to lead Canadian $1 million-plus real estate sales this fall.
- The strongest performer of all major metropolitan markets in the first half of the year, high-end real estate in the GTA was characterized by heightened sales volume and multiple offers over the summer months.
- Sales over $1 million up 53.5% year-over-year in July and August and the $4 million-plus category performed exceptionally well with year-over-year gains of 158.3%.
- Momentum is expected to accelerate into the fall, given limited inventory, low interest rates, high consumer confidence and the influence of foreign buyers, particularly from mainland China.
- Detached single family homes are expected to experience continued price gains, pre-emptive and multiple offers, and sales above list price.
- Heightened demand in the $1 million-plus attached home and condo market is anticipated, while continued competition in traditional luxury neighbourhoods will result in growth in the $1 million-plus market in emerging high-end neighbourhoods in the northern part of the city, including York.
Montréal Market Highlights:
- Balance is anticipated to remain in Montreal’s high-end real estate market in fall 2015.
- Following a period of heightened activity in the latter half of 2014 resulting from consumer confidence instilled by the results of the provincial election, sales of top-tier real estate stabilized in the first half of 2015.
- This trend continued throughout the summer and the high-end market is expected to remain consistent in terms of both sales volume and selling prices in the fall, with the majority of sales anticipated in the $1-1.5 million single-family home market.
- Along with demand from the Middle East and France, Montreal has experienced an uptick in buyers from mainland China seeking multiple properties or condo units in recent months, a trend that is expected to continue into the fall.
Disclaimer *The information contained in this report references data from Statistics Canada, the Bank of Canada, the Canadian Real Estate Association, Canada Mortgage and Housing Corporation, MLS boards across Canada and other secondary sources. Sotheby’s International Realty Canada cautions that data of this nature can be useful in establishing trends over time, but do not indicate actual prices in widely divergent neighbourhoods or account for price differentials within local markets. This report is published for general information only and not to be relied upon in any way. Although high standards have been used in the preparation of the information and analysis presented in this report, no responsibility or liability whatsoever can be accepted by Sotheby’s International Realty Canada or Sotheby’s International Realty Affiliates for any loss or damage resultant from any use of, reliance on or reference to the contents of this document.