Sotheby’s International Realty Canada’s 2019 Mid-Year Top-Tier Real Estate Report revealed that the performance of the country’s top-tier real estate markets veered in separate directions in the first half of 2019, even as second-quarter gains in the country’s economy stabilized overall housing demand. The Greater Toronto Area (GTA) market revitalized with healthy increases in sales over $1 million, while Montreal’s $1 million-plus real estate sales achieved new records in condo activity and balanced gains overall. In spite of renewed conventional real estate activity in Calgary, market recovery lagged in the top-tier segment, which remained entrenched in buyers’ market territory. Meanwhile, slowing sales and excess inventory burdened Vancouver’s market for real estate over $1 million and falling prices recalibrated demand across the city’s housing market.
The market for real estate over $1 million decelerated in the City of Vancouver in the first half of 2019 as the market continued to bear the burden of tightened mortgage rules, multiple governmental policies and taxes, hesitant sellers and fickle buyers lacking motivation to commit to transactions. According to Sotheby’s International Realty Canada experts, the disparity between purchaser and seller pricing expectations continued to reconcile over the first half of the year. While an uptick in home buyer interest and open house activity did not translate into consistent gains in the first quarter, by mid-year, quality properties priced for 2019 buyers’ market conditions were drawing bids, and in occasional instances, bidding wars. Overall $1 million-plus real estate sales (condominiums, attached and single family homes) fell 33% from 2018 levels, while $4 million-plus luxury sales declined 34%.
In the City of Calgary, a gradual economic recovery and easing housing prices re-engaged purchasers in the market for homes under $500,000 in the first half of the year. $1 million-plus market performance was inconsistent; activity in certain top-tier neighbourhoods strengthened, while others remained quiet. Market conditions continued to skew heavily in favour of buyers, and supply continued to surpass demand, placing downward pressure on prices. Sales of residential real estate over $1 million (condominiums, attached and single family homes) fell 21% in the first six months of 2019 from previous year’s levels.
Following record-setting sales activity and price gains in 2017, the Greater Toronto Area (Durham, Halton, Peel, Toronto and York) top-tier real estate market adjusted to healthier levels over 2018 and into 2019. Consumer demand was resilient, bolstered by optimistic projections that the Toronto economy is set to lead Canada’s major metropolitan areas in growth in 2019. As a result, top-tier sales in the first six months of the year reflected confident gains in spite of a prolonged winter that delayed spring real estate activity. In the first half of 2019, residential real estate over $1 million sales (condominiums, attached and single family homes) in Canada’s largest real estate market renewed with a 12% increase from 2018 levels. Luxury real estate sales over $4 million on the Multiple Listings Service (MLS) fell 19%, a shortfall due in part to a shift in luxury sales to exclusive sales and marketing channels following recent Competition Bureau rulings that make MLS transaction data publicly available. The City of Toronto’s top-tier real estate market outperformed surrounding areas: sales over $1 million were up 13% year-over-year in the first half of 2019, while sales over $4 million steadied with a nominal 2% dip.
Sales of City of Montreal real estate over $1 million in the first half of 2019 reflected a vibrant, expanding luxury market. The city surpassed other Canadian major metropolitan real estate markets in year-over-year percentage gains in top-tier condo sales and is on track to follow record-setting gains in 2017 through 2018 with another banner year. Residential real estate sales over $1 million (condominiums, attached and single family homes) increased 5% in the first half of 2019, while sales over $4 million were up 267% year-over-year. Diminishing supply and enduring local demand perpetuated sellers’ market conditions and price gains across all housing types.
*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.