Toronto positioned for greatest gains, momentum continues in Vancouver, Montreal to sustain balance, and Calgary prices to soften, says Sotheby’s International Realty Canada 

Vancouver, B.C. (March 3, 2016)Sotheby’s International Realty Canada is forecasting the Greater Toronto Area (GTA) will lead the $1 million-plus residential real estate market into spring 2016, with continued sales gains and further price escalation. Notable growth is also expected for Vancouver’s top-tier residential real estate market, with strong increases anticipated in the $4 million-plus luxury market segment both in Vancouver and the GTA. Key market and macro-economic indicators foreshadow continued stability in Montreal’s luxury real estate market, while price declines are expected to sustain a buyers’ market in Calgary into the spring.

As reported by Sotheby’s International Realty Canada in January 2016, the performance of major Canadian real estate markets diverged in 2015. While sales of real estate over $1 million (condominiums, attached homes and detached single family homes) increased 48%, 46% and 15% year-over-year in the GTA, Vancouver and Montreal respectively, sales volume decreased 41% in Calgary. During this time, luxury real estate sales over $4 million soared in Canada’s two largest real estate markets, with sales volume increasing 67% in Vancouver and 71% in the GTA year-over-year.

Limited inventory, resilient consumer confidence, strong domestic and supplemental international demand, below national average unemployment, and low interest rates are expected to propel positive growth in the GTA and Vancouver. Stability in the Montreal market will lead to consistent sales, while continued economic uncertainty in Calgary will increase available inventory and contribute to declining home prices across the conventional and top-tier markets.

According to Brad Henderson, President and CEO of Sotheby’s International Realty Canada, “Luxury home sales in Toronto and Vancouver will continue to defy gravity this spring. Both markets have the potential for significant gains, and we expect heightened demand and insufficient inventory to drive price escalation and sellers’ market conditions.”

National Highlights:

  • The impact of diminishing prospects for global and national economic growth, including the OECD’s reduction of Canada’s economic growth projection from 2% to 1.4% in February 2016, has varied from market to market. Ontario and British Columbia are projected to lead Canada’s growth in 2016, resulting in strong consumer confidence, increased net migration, and sustained foreign demand in the GTA and Vancouver. Quebec’s steady growth indicators have contributed to market balance in Montreal, while continued instability in the oil and gas sector will challenge consumer confidence in Calgary.
  • The uptick in the national unemployment rate to 7.2% in January 2016 has also translated into divergent implications for metropolitan real estate markets. Below national average unemployment rates of 5.7% in Vancouver and 7.1% in Toronto in January 2016 are positive indicators. Calgary’s unemployment rate, which rose to 7.7% resulting from losses in the energy sector, will continue to temper high-end sales.
  • Low inventory and unrelenting demand for top-tier single family homes in the GTA and Vancouver will continue to drive sales volume and prices. Benchmark pricing for detached homes, which rose to $1,061,789 in the City of Toronto, $2,928,800 in Vancouver West and $1,234,100 in Vancouver East in January 2016, will continue its trajectory. The top-tier detached home market will be characterized by fewer days on market, an increasing number of homes sold over list price, and bidding wars.
  • Affordability will be a defining market influence in Vancouver and the GTA as buyers seek alternatives to single family homes. Demand for attached homes and condominiums in the $1 million-plus market is expected to rise. Notably, federal and provincial housing policy introduced in late 2015 and early 2016 aimed at addressing affordability concerns are expected to have a negligible impact on the top-tier real estate market into spring 2016 as strong market fundamentals prevail.
  • The decision by the Bank of Canada to hold the key overnight interest rate at 0.5% in January 2016 along with the expectation that mortgage rates will remain low into the spring will continue to have a positive impact on home sales over $1 million.
  • The weak Canadian dollar has made real estate more attractive to domestic and foreign buyers, however, other market fundamentals have had, and will continue to have greater impact on the $1 million-plus real estate market across Canada into spring 2016.


Vancouver is expected to exhibit strong sales in the $1 million-plus real estate market into the spring. Within the first two months of 2016, real estate sales over $1 million increased 23% year-over-year to 771 units as competition amongst buyers intensified. Detached single family home sales over $1 million, saw a 16% increase to 557 units.

Limited supply, strong consumer demand, low interest rates, and international demand largely driven by both end users and investors from mainland China will place upward pressure on prices, and incent bidding wars and contract assignments. While strong performance is anticipated for the condominium and attached home markets, the detached single family home market is expected to continue to lead percentage gains in sales volume, particularly in the market for homes over $4 million in prime neighbourhoods. Affordability is projected to be a critical concern: with other market influences taking precedent, recent policy measures introduced by the provincial government with the February 2016 BC Budget are not expected to dampen the top-tier real estate market in 2016.


Calgary’s $1 million-plus real estate market will favour buyers into spring, with the need for sellers to adopt pricing and marketing strategies accordingly. Total residential sales over $1 million in the first two months of 2016 reflected a promising 26% year-over-year increase to 63 units, while sales of single family homes over $1 million rose 31% to 55 units.

While the Calgary market is expected to weather volatile oil prices, uncertain economic conditions and job losses into spring, the market for real estate over $1 million has the potential to see an uptick in sales activity. Projected price reductions in the condominium, attached and detached single family home segments, as well as increasing resale inventory listed by motivated sellers, will encourage transactions, even as consumer confidence remains unstable. With declining prices and a weak Canadian dollar, top-tier Calgary real estate has experienced an increase in U.S. and domestic, out-of-province interest, a trend that may solidify in 2016.


Strong sales and steeper price inflation is anticipated in the top-tier real estate market in the GTA (Durham, Halton, Peel, Toronto and York) in spring 2016, predominantly fueled by an acute shortage of inventory in prime neighbourhoods and continued confidence in the housing market. While the GTA remains attractive for foreign investors and immigrants, local and domestic demand will remain primary drivers.

$1 million-plus real estate sales experienced the most significant growth in the first two months of the year, with total sales volume gains of 63% to 1,646 units over the same period in 2015. The majority of transactions were detached single family home sales, which increased 63% to 1,486 units sold. As intensifying demand outpaces supply, bidding wars and sales above list prices will trend upward, particularly within the single family home market. Strong performance is also projected for the top-tier condominium and attached home markets. Across all housing types, luxury real estate over $4 million is expected to experience the greatest percentage gains in sales volume. Affordability is a growing concern in the GTA, particularly in the market for single family homes under $1.5 million. As a result, a shift in interest to attached homes is expected to continue, as well as homebuyer migration beyond the city of Toronto.


A balanced market is expected in Montreal’s $1 million-plus real estate market in spring 2016. The sales volume of top-tier detached single family homes, attached homes and condominiums are expected to remain comparable to 2015 levels.

Real estate sales over $1 million in the first two months of 2016 reflected an increase of 23% to 80 units, with the majority of transactions in the single family home category, foreshadowing a balanced market. Prices are expected to remain stable in the market for $1 million-plus single family and attached homes, however, an increase in supply of new-build condominiums in 2016 is expected to result in price declines across all price ranges this spring. The lower Canadian dollar is expected to have a positive impact on the Montreal market by attracting additional foreign interest, primarily from mainland China and France.

Click Here to Download the Complete Year End Report on Canada’s Luxury Real Estate Market for 2015

Disclaimer *The information contained in this report references market data from MLS boards across Canada. Sotheby’s International Realty Canada cautions that MLS market data can be useful in establishing trends over time, but does not indicate actual prices in widely divergent neighborhoods 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.




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