Relax & Retreat: The Secret of Co-Ownership
Insight Magazine
Today’s financial climate promises new buying opportunities in luxury real estate: competition has softened and prices in some neighbourhoods have pulled back from a few years ago.
Many agents believe that the current landscape holds big rewards for proactive buyers. Observing a surge in ultra-luxury condo sales in Oakville, Petrus Engelbrecht, a Senior Vice-President of Sales at Sotheby’s International Realty Canada says it’s an indication that discerning individuals of wealth see the market as having reached its low point. “They are currently in estate-like homes that they’ll sell later, but they like the idea of having a penthouse for that next stage — and they have the cash to write a cheque when they know that they’re not going to be overpaying.” With promising potential within luxury real estate markets nationwide, Engelbrecht and his colleagues share their insights for buyers.
OAKVILLE
While there’s more flexibility in negotiating Oakville home prices, Engelbrecht underscores the importance of handling the city’s luxury real estate transactions with tact. “These are unique properties with unique personalities behind them,” he says. “Buyers strongly believe that prices should be lower and vendors strongly believe that the value is there. And if you approach people incorrectly, the chances of a transaction coming together diminishes.” For those seeking to negotiate, he recommends allowing their real estate agents to initiate conversations to build the necessary trust with a seller’s agent.
Still, there are opportunities for leverage, especially when a seller is under financial pressure. “Right now, many buyers’ agents are asking, ‘Would it be beneficial for your seller to close quickly?’” Engelbrecht reports. “They’re indicating that they could do an all-cash transaction that will quickly relieve any duress,” like in instances where a seller is eyeing another property but needs to close their current home first, so may be motivated to accept a lower offer. “It’s a chicken-and-egg scenario,” he explains. “People can’t buy until they’ve sold, but many homes are taking so long to sell.”
TORONTO
Paul Maranger, a Senior Vice-President of Sales at Sotheby’s International Realty Canada, sees a shift in Toronto’s luxury real estate towards a balanced market, providing new advantages for buyers. There’s the luxury of time,” he notes, “[Without] the pressure of competing multiple offers, we’re seeing a slower negotiation style with more room for buyers to discuss closing dates and price. The minute the market takes off again, there’s going to be pent-up demand and it’s going to be on fire.”
His business partner and fellow Senior Vice-President of Sales, Christian Vermast, advocates for buying overlooked luxury condo buildings built between 1980-2000. “They’re in prime locations, usually on more land, which means they’re not up against each other like you’ll find with newer constructions. In terms of management, they’re well-oiled machines,” says Vermast. “They just don’t have glitzy interiors, so they require some creative vision and time to refresh the dated finishes.” For those craving customization and downsizing in the future, these properties are appealing.“Downsizers tend to look at the pre-construction market when they’re starting to plan for a move that’s a few years away,” notes Vermast. “But pre-construction condos sell at a 30 per cent premium. Given the savings available in the luxury condo market, it makes sense to buy something finished and use the next few years to renovate or rent it out.”
VICTORIA
Comparing the sales of luxury homes in Victoria priced over $4 million in 2021 and 2023, Glynis MacLeod, a Senior Vice-President of Sales at Sotheby’s International Realty Canada, says the number of transactions remain constant, however, with an 11 per cent decrease in the average selling price. The listing period has also ballooned from 63 days to 105. MacLeod attributes this to luxury sellers harbouring unrealistic expectations, noting that many properties will eventually be re-listed at lower prices. “The longer a property has been on the market, the more negotiable it is,” she says. “A luxury home in Victoria might be someone’s second home. When the market contracts, those are the properties people want to sell first.”
Building on that point, financial pressures serve as an incentive to close quickly, particularly for all-cash offers. “Cash is king,” she says, adding that Victoria’s luxury real estate market presents a robust investment opportunity. “We’re unique because we offer retirees the promise of a warm climate in Canada [where they can] receive healthcare.” MacLeod believes the influx of remote workers relocating to Victoria are contributing to the market’s current sustained demand. “When the market slows down, people focus on the core neighbourhoods, like Oak Bay, where prices remain consistently high. But when the market picks up, that’s when more people start looking beyond those core areas.”
CALGARY
Renata Reid, a Senior Vice-President of Sales at Sotheby’s International Realty Canada, notes that unlike other cities, Calgary has not witnessed a similar slowdown or price drop. “We saw an increase in new listings — up 40 per cent since 2022 — but there was low inventory,” Reid reports, attributing the market’s resilience to an influx of people relocating to the city. “Some of the people moving here are adopting hybrid setups, where they’re keeping their job elsewhere and occasionally flying back and forth.”
For those entering Calgary’s luxury market, Reid highlights the city’s approachable real estate prices with compelling savings opportunities. “People are able to buy so much more in terms of land and sometimes in terms of multiple properties.” One trend she’s observing is buyers acquiring multiple houses. “They focus on getting a property in a great school district for their own family residence,” she adds. “And then maybe buy another two homes near the university as investments.” In a market brimming with smart real estate prospects, why stop at one transaction?
By Eric Mutrie — *Insight: The Art Of Living Magazine – The Metamorphosis Issue.
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