• Claudine Montano
  • 07/22/23

Canada's luxury housing market recovers, but faces significant changes, affecting four major markets.

The luxury real estate market experienced activity in the second quarter, with buyers and sellers re-engaging after waiting on the sidelines due to the Bank of Canada's aggressive interest rate hike campaign. However, the market has diverged in major cities due to local influences like migration, supply, and buyer intentions. Luxury housing has entered a new era, with performance trends no longer applicable to all regions, despite challenges from interest rate increases and economic uncertainty.

The Canadian luxury market experienced unexpected divergence between major cities, neighborhoods, and housing types. In Vancouver, ultra-luxury sales of residences above $10 million grew significantly, driven by wealth transfer, consumer confidence, and wealth planning. The market returned to more balanced conditions, despite a shortage of supply and higher mortgage rates.

Toronto's luxury market experienced steady activity due to immigration and returning buyers and investors. However, a lack of supply hindered transactions, with sales of homes above $4 million down 32% compared to last year. Greater Toronto Area listings led to a more balanced market. Montreal's market experienced a decline in sales, with homes above $4 million falling 39% and transactions of $1 million falling 28%.

Luxury market activity was strong, but economic uncertainty and higher mortgage rates keep some buyers on the sidelines. Conventional buyers, hoping for improved mortgage rates, inflation, and property prices, face risks due to the unpredictability of the housing market.

In June, inflation cooled to 2.8%, within Bank of Canada's target range of 1% to 3%. Gasoline price decline reduced reading, grocery store prices rose 9.1%, and mortgage interest costs grew 31.1%.





source: financialpost

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With more than a decade of experience, Claudine Montano possesses a strong business acumen of Toronto’s constantly evolving real estate market. Claudine Montano is a Broker of Record with RE/MAX Hallmark Montano Group Realty affiliated with RE/MAX Hallmark.

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