A strengthening Canadian economy is projected to have a positive, cascading impact on the nation’s high-end residential real estate market this fall. Montreal is forecast to emerge as a luxury real estate hot spot, with gains in sales volume and pricing expected in the $1 million-plus segment of the market. Strong economic fundamentals are set to foster healthy activity in the high-end Greater Toronto Area (GTA) market, even as it recedes from record highs following the introduction of the Ontario Fair Housing Plan. Fueled by strong local demand redirected into the city’s condominium sector, Vancouver’s $1 million-plus real estate market is anticipated to regain momentum in the coming months, while tentative optimism is set to gain ground in Calgary as the city emerges from recession.

Summer data compiled by Sotheby’s International Realty Canada for the country’s four largest metropolitan markets indicates the direction of the fall top tier market performance. Montreal’s $1 million-plus real estate sales (condominiums, attached and single family homes) soared 60% year-over-year in July and August, pointing to exceptional performance to the end of 2017. GTA (Durham, Halton, Peel, Toronto and York) July and August sales over $1 million receded 40% year-over-year from historic highs, while luxury sales volume over $4 million declined 29%; meanwhile, city of Toronto sales over $1 million and $4 million decreased 27% and 28% year-over-year respectively. Calgary sales over $1 million were almost on par with the previous summers’, recording a 1% year-over-year gain that indicates stability for the coming months. While Vancouver’s luxury real estate sales over $4 million fell 21% year-over-year in July and August, overall $1 million-plus sales increased 5% compared to the same months in 2016.

“The country’s exceptional economic performance is expected to elevate top-tier real estate market confidence and performance this fall,” says Brad Henderson, President and CEO of Sotheby’s International Realty Canada. “Montreal, in particular, is emerging as an unexpected bright light on Canada’s luxury real estate horizon, but the reality is that improvement in economic productivity, wages and job gains will be positive for all of our metropolitan markets in the coming months.”

Key National Influencers:

  • A strong Canadian economy is projected to propel consumer, business and top-tier real estate market confidence and activity in fall 2017. The economy expanded at its fastest annualized rate in six years between March and June, according to Statistics Canada, recording an annualized 4.5% rate of expansion that outpaced earlier projections. These numbers followed upgraded economic growth forecasts from the International Monetary Fund (IMF) and Bank of Canada released in July: the IMF projected that Canada will lead G7 countries in economic gains this year, and upgraded its forecast for annual economic growth to 2.5%. The Bank of Canada also increased its projection for 2017 Canadian economic growth to 2.8%.
  • Falling national unemployment rates and job gains in the country’s major real estate markets are anticipated to bolster local demand for conventional and top-tier real estate. Canada’s unemployment rate fell to 6.2% in August 2017, the lowest level since the onset of the Great Recession in October 2008. Vancouver continued to post the lowest rate of Canada’s largest cities, with an unemployment rate of 4.7%, while Montreal’s rate fell to 5.0%. Toronto’s rate of 6.4% remained slightly elevated above the national average, however, the province of Ontario drove national employment gains with 31,100 net new positions. At 8.5%, Calgary’s unemployment rate continues to pose a risk to the gradual stabilization of the city’s top-tier real estate market this fall.
  • Two consecutive key interest rate hikes by the Bank of Canada, the first in July and the second in September, positions the key interest rate at 1.00% leading into fall. In spite of the resulting uptick in mortgage rates, the impact of the incremental increase from historic lows is anticipated to be minimal on top-tier real estate activity, so long as subsequent increases are well signaled and in line with real gains in the economy.
  • In spite of the strengthening Canadian dollar, which hovered around 80 cents to the US in September 2017, foreign demand for Canada’s top-tier real estate remains high. The gap in currency values remains notable. Vancouver, Toronto and Calgary, which are ranked third, fourth and fifth by the Economist Intelligence Unit in its latest global livability rankings, as well as the city of Montreal, remain desirable destinations for immigration, work and study.


Following an exceptionally heated summer market, Montreal is forecast to emerge as a strong leader on Canada’s luxury real estate landscape this fall. July and August sales over $1 million surged 60% over the same months in 2016 to 115 properties (condominiums, attached and single family homes) sold, a steep escalation from the 17% year-over-year gains experienced in the first half of 2017.

Strong job gains and a healthy economy lifted local consumer confidence and fueled luxury market activity that resulted in soaring activity, an lift in prices, and an increase in the incidence of bidding wars in several of the city’s prime, luxury neighbourhoods, including Westmount, Outremont and Town of Mount Royal. Montreal’s luxury market remains dominated by local demand, however, industry insiders anecdotally report an uptick in interest from foreign buyers seeking residences.

The city’s luxury condominium market also experienced a sharp 40% rise in summer sales to 14 units sold over $1 million, performance that outpaced industry expectations, and positioned the category to continue its trajectory of healthy gains this fall.

With positive economic and market conditions gaining traction, and with the city’s luxury real estate positioned competitively, relative to markets in other major Canadian city centres, Montreal’s top-tier real estate market is projected to accelerate to the end of the year.

Greater Toronto Area (GTA):

The introduction of the 16-measure Ontario Fair Housing Plan in April 2017 introduced uncertainty to the Greater Toronto Area’s heated top-tier real estate market. In spite of this, real estate sales over $1 million soared 41% and 25% year-over-year in the Greater Toronto Area and city of Toronto, in the first six months of the year. Summer top-tier sales activity, however, indicates a return to healthier levels of fall market activity from previous highs, with the detached single family home market expected to moderate by the end of the year.

Summer sales volume over $1 million (condominiums, attached and single family homes) fell 39% year-over-year to 1,926 GTA properties sold in July and August, as luxury sales over $4 million contracted 29% to 35 units sold. During this period, sales over $1 million and $4 million in the city of Toronto fell 27% and 28% year-over-year, to 793 and 23 properties. Market activity softened across all segments, however, prices in the top-tier maintained relative stability even as bidding wars dissipated.

The top-tier single family home market reflected the most pronounced adjustment over the summer months: sales over $1 million experienced a 44% and 37% decline in sales volume in the GTA and city of Toronto respectively, falling to 1,600 and 517 units sold. Sales of homes over $4 million fell 34% year-over-year to 31 units in the GTA, and 33% to 20 units in the city of Toronto.

The summer market for condominiums over $1 million maintained comparative resilience, with sales volume up 8% year-over-year in the GTA and up 15% in the city of Toronto to 155 and 140 units respectively. Four of the GTA condo sales were over $4 million, up from two units from the same period in 2016. Of this summer’s $4 million-plus sales, three were in the city of Toronto. Monthly data however, reveals a marked drop in sales in August relative to July: while July sales over $1 million were up 33% and 43% year-over-year in the GTA and the city of Toronto respectively, August sales fell 11% and 6% year-over-year. Recent measures to expand rent control to all private rental units in Ontario are expected to prompt condominium investors to reconsider purchases and may result in an increase in fall listings.

In spite of policy headwinds, a brisk and active top-tier real estate market is forecast for fall. New inventory is expected to be introduced into the market as vendors aim to exit at current highs, offsetting an enduring shortage of supply. Buyer activity is projected to moderate to healthier norms. Although several months will be required for consumer sentiment and the top-tier market to stabilize following the initial “shock” of policy introductions, strong economic fundamentals are expected to anchor top-tier market health in the long term.


Top-tier real estate sales over the summer months reflected Calgary’s tentative return to stability as Alberta gradually emerged from recession; data and industry insights suggest an active buyers’ market into the fall. Following a 24% year-over-year increase in sales over $1 million (condominiums, attached and single family homes) in the first half of the year, 112 properties sold over $1 million in July and August 2017, on par with the 111 properties sold in the summer months of 2016.

Although the single family home market remained stable with 95 homes sold over $1 million, in line with the 96 units sold over the summer of 2017, the city’s luxury condominium market reflected greater vulnerability, with two units sold above $1 million over the summer months compared to six sold over the course of the same months of 2016. In spite of this, the highest year-to-date sale of a $6 million suite in The River by Sotheby’s International Realty Canada in August 2017, demonstrates that buyers are judiciously investing in top-tier condominium opportunities.

These gains follow a year in which GTA sales over $1 million and $4 million surged 77% and 95% in 2016 over 2015, while $1 million-plus and $4 million-plus sales in the city of Toronto increased 44% and 87% year-over-year.

In spite of renewed market activity, the recovery of Calgary’s top-tier real estate market remains volatile and fragmented. Fall performance is projected to be vastly divergent between neighbourhoods, with bidding wars and rapid turnover expected to continue in some, while oversupply and stasis is anticipated for others. Stubbornly high levels of unemployment and rental vacancy rates, negative interprovincial migration, and cautious consumer sentiment will continue to enforce a buyers’ market to the end of the year.


One year following the August 2016 implementation of the Metro Vancouver 15% foreign buyers’ tax, sales activity in the city of Vancouver’s $1 million-plus real estate market resumed a more active pace over the summer months, foreshadowing a healthy and active top-tier fall market.

In spite of a 23% year-over-year decline in sales over $1 million in the first half of 2017, monthly data compiled in Sotheby’s International Realty Canada’s Mid-Year Top-Tier Report revealed that market momentum strengthened as the year progressed. This trajectory continued through the summer, with July sales contracting 2% and August sales increasing 16% year-over-year respectively. Overall, 598 $1 million-plus properties (condominiums, attached and single family homes) sold over the summer, up 5% compared to the same months in 2016. Luxury real estate sales over $4 million, were down 21% to 46 units sold.

Gains were largely propelled by a summer groundswell of condominium demand that rapidly surpassed available inventory. While condominium sales over $1 million were up a nominal 5% year-over-year in the first half of 2017, sales increased 27% year over-year in July and surged a more significant 53% year-over-year in August, with industry reports of bidding wars on available properties. This resulted in a 36% year-over-year increase in overall summer sales, with 206 condominiums sold over $1 million. Only five sales were in the luxury segment over $4 million, compared to nine units sold in summer 2016.

In contrast, the volume of single family homes sold over $1 million dipped 10% to 293 units in the summer of 2017 compared to the same months in 2016, while luxury home sales over $4 million fell 20% to 39 homes.

The city’s strong economy, low unemployment rate and razor thin vacancy rates have restored local real estate consumer confidence in spite of recent policy interventions. This fall, home buyers and sellers who waited on the sidelines over the previous year are expected to return to the top-tier market. Constrained by a lack of options and motivated by demographic needs and lifestyle preferences, this activity is projected to fuel heated high-end condominium demand in the months to come.

Download the 2017 Mid-Year Top-Tier Real Estate Report (released July 2017)

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.

Receive your complimentary subscription to INSIGHT: The Art of Living magazine