Toronto, Ontario, Jan. 15, 2020 (GLOBE NEWSWIRE) — According to a report released today by Sotheby’s International Realty Canada (sothebysrealty.ca), Canada’s two largest top-tier metropolitan real estate markets rallied in 2019, gaining steady traction throughout the year. After a tentative start to 2019, the Greater Toronto Area (GTA) led the country in top-tier real estate performance with consistent and confident increases in sales activity and pricing, bolstered by the region’s strong population gains, healthy economic growth and robust labour market. Vancouver overcame several years of uncertainty fostered by ongoing government and regulatory interventions to see revitalized confidence and activity in the $1 million-plus real estate market by the last half of 2019. Montreal’s luxury real estate market achieved notable milestones in its condominium sector in 2019, as the city set new records in top-tier market performance. Despite improvements in the market for real estate under $500,000, Calgary’s uneven economic performance and political turbulence dampened a top-tier market already burdened with supply; as a result, recovery continued to lag.
The Greater Toronto Area’s (Durham, Halton, Peel, Toronto and York) top-tier real estate market thrived in 2019. In contrast to the market contraction experienced in 2018 following the implementation of tighter mortgage lending policies shortly after the 2017 introduction of the Ontario Fair Housing plan, residential real estate sales over $1 million (condominiums, attached and single family homes) increased 23% year-over-year. The City of Toronto continued to see $1 million-plus activity escalate in 2019, with sales over $1 million increasing 20%. The migration of luxury real estate sales away from Multiple Listings Service (MLS) to exclusive sales and marketing platforms offering consumer privacy continued to skew sales data. As a result, GTA and City of Toronto sales over $4 million on MLS reflected a 3% decline and subtle 5% increase in spite of healthy activity through 2019.
Following several years of lackluster performance, the City of Vancouver’s top-tier real estate market recovered in the latter half of 2019. Activity resumed as prospective buyers and sellers returned from the sidelines to engage in the market with a willingness to calibrate prices to match current conditions. Overall $1 million-plus residential real estate sales in Vancouver were down 6% in 2019 from 2018 levels, while sales over $4 million declined 25%. However, activity in the last half of 2019 reflected a strengthening top-tier market as sales over $1 million increased 37% year-over-year, led by notable gains in the city’s single family and attached home segments. With prices moderating, top-tier real estate consumers reassessed single family homes with increasing favour relative to condominium and attached home options, driving new activity. As a result, $1 million-plus single family home sales, which had fallen 16%, 20% and 35% from 2015 – 2016, 2016 – 2017 and 2017 – 2018 respectively, increased 5% from 2018 to 2019. Market recovery was most evident in the latter half of 2019, when sales over $1 million rose 39% from the same period in 2018, while $4 million-plus luxury sales contracted a mild 12%.
Strong economic fundamentals and consumer confidence, as well as record-setting provincial population gains, fostered healthy demand for top-tier real estate in the City of Montreal. Residential sales over $1 million saw a 13% increase from 2018 levels, while $4 million-plus luxury sales soared 64% year-over-year. In 2019, Montreal’s luxury condominium market surpassed previous year’s records as the construction and completion of high-end high-rises reshaped the skyline. For the first time in the city’s history, top-tier condominiums comprised over 20% of residential real estate sales volume over $1 million. As the city continued to raise its profile as a major Canadian luxury condominium market, sales of condominiums over $1 million set a new record with a 39% year-over-year gain.
The City of Calgary’s top-tier market faltered with building economic and political anxiety leading up to and following the provincial and federal elections. Residential real estate sales over $1 million decreased 13% from 2018 levels overall; however, sales in the latter half of the year reflected a milder 2% decline from the same period in 2018.
“Canada’s top-tier real estate market resurged in 2019 as the country’s two largest metropolitan areas overcame several years of uncertainty to demonstrate consistent and continuous gains. As Canada’s economic and population epicentre, Toronto held its place as the nation’s leading top-tier market with bold gains across all housing types,” says Don Kottick, President and CEO of Sotheby’s International Realty Canada. “Vancouver’s long-awaited market recovery emerged in the last half of 2019 with steady progress in the city’s top-tier single family and attached home markets.”
According to Kottick, Montreal continued to assert itself as a key Canadian luxury real estate destination in 2019, most notably with the record-setting expansion of its high-end condominium market. Meanwhile, Calgary’s top-tier market recovery remained elusive in 2019.
Record-setting population gains in Canada’s largest urban areas were pivotal drivers of the conventional and top-tier housing markets, absorbing inventory and expanding the long-term foundation for local housing demand. Furthermore, the decade-long financial bull market and its bouts of recent unpredictability are growing influences on the Canadian top-tier real estate market. Underlying consumer anxiety regarding future financial market performance has increased demand for top-tier real estate as an asset to diversify portfolios, hedge against inflation, and buffer against risk.
The City of Vancouver’s top-tier real estate market began to find its footing in the latter half of 2019, reflecting clear signs that it was on the path to recovery. As prices adjusted downward to reflect more balanced market conditions, buyers and investors returned tentatively in the first half of the year, and more steadily in the latter half of 2019. Overall, $1 million-plus real estate sales in Vancouver (condominiums, attached and single family homes) decreased 6% to 2,967 units sold in 2019, while luxury sales over $4 million were down 25% to 147 properties sold.
However, sales activity in the last half of 2019 reflected a strengthening top-tier market. Sotheby’s International Realty Canada noted that the market for real estate over $1 million was uncharacteristically active over the summer months, bucking the trend for a seasonal slowdown. This was followed by a significant upswing in top-tier market activity in the fall. Overall $1 million-plus sales between July 1– December 31, 2019 were up 37% year-over-year from the last half of 2018 to 3,151 properties sold. During this time, $1–2 million sales rose 44% year-over-year and $2–4 million sales increased 32%. Luxury real estate activity over $4 million placed a drag on overall top-tier market performance, remaining 12% below sales in the last half of 2018. This cooldown in the ultra-luxury market is attributable to several factors related to the introduction of multiple taxes and policies aimed at limiting international investment and unoccupied dwellings, which have calmed demand from pure investors and second-home buyers, redirecting some of that interest to markets such as Montreal and Toronto.
Recovery in the $1 million-plus segment was led by the city’s renewing single family home market, which saw 2019 sales come into balance with a 5% year-over-year incline from 2018 levels to 1,586 homes sold. The luxury $4 million-plus segment experienced a year-over-year decline of 15% to 129 homes sold. Single family home sales over $1 million in the last half of 2019 rose a more robust 39% from the last of 2018, reflecting a market in steady recovery.
Tight supply, as well as a shift in consumer interest to the rebalancing single family home market, resulted in a slight decline in $1 million-plus attached home sales by 2% year-over-year to 549 homes sold in 2019. In spite of inventory constraints, strengthening consumer confidence and underlying need translated into surging sales in the latter half of 2019, as the volume of attached homes sold over $1 million rose 62% from 2018 levels.
The renewal of the city’s top-tier condo market lagged behind that of the single family and attached home markets, but showed signs of rebalancing in the latter half of the year. Overall, 832 condos over $1 million sold in 2019, a 25% annual decrease, while luxury sales over $4 million declined a more significant 59% to 16 units sold. In contrast, condominium sales over $1 million between July 1 – December 31, 2019 increased 21% from the same period in 2018.
With the clear improvement in market activity that was seen between the first and second half of the year, it is expected that Vancouver’s top-tier real estate market will continue its positive trajectory as consumers continue to return to the market and as sellers price homes to current conditions. This, combined with a strong economy propelling in-migration and immigration to a city ranked sixth in the Economist Intelligence Unit’s Global Livability Index in 2019, positions Vancouver to see strengthening demand for top-tier real estate in the first quarter of 2020.
Following a fragile market in 2018, the prospect for recovery in the City of Calgary’s $1 million-plus real estate market was tenuous in 2019. A challenging market prevailed as weakness in the energy and agriculture sectors permeated the local economy. As Alberta’s growth forecast slowed, Calgary’s real GDP contracted 0.4% and the unemployment rate hit 6.9%, well above the national rate. Economic and political anxiety built up in the months leading up to a contentious federal election in October 2019 and remained elevated in the months that followed. Consumer confidence also faltered following the end-of-year release of a provincial budget that aims to reduce expenditures by $1.3 billion from the previous year’s spending levels.
In spite of these compounding challenges, Calgary’s overall real estate sales activity experienced an uptick in the fall, driven largely by improvements in the market for housing under $500,000. However, the city remained oversupplied with top-tier inventory. As a result, recovery in Calgary’s top-tier real estate market remained elusive in 2019 as activity and housing prices trended downward throughout the year. Residential real estate sales over $1 million (condominiums, attached and single family homes) decreased 13% to 531 units sold in 2019. As in 2018, two homes were sold over $4 million on Multiple Listing Service (MLS) in 2019, reflecting soft demand in the city’s ultra-luxury market. However, Sotheby’s International Realty Canada’s sale of a prestigious estate in December 2019 at a price that was the highest for a detached home in Calgary since January 2015 reflected the persistence of demand for the city’s premier real estate, so long as strategic pricing, targeted marketing and comprehensive exposure aligned.
Single family home sales comprised the vast majority of $1 million-plus residential sales volume in Calgary in 2019, at 90%. However, consumer demand within this market-dominant segment continued to waver. $1 million-plus single family home sales saw a 12% decrease in activity with 477 homes sold in 2019. Following an uptick in $1 million-plus condominium sales activity in 2018, Calgary’s top-tier condominium market waned in 2019. Sales over $1 million experienced a 45% year-over-year decline to 16 units sold as the market remained heavily favourable to prospective buyers and investors. Sales of attached homes over $1 million also declined 12%, with 38 homes sold in 2019.
Despite this annual decline, overall residential real estate sales over $1 million stabilized in the latter half of 2019, dipping 2% from the same period in 2018 to 256 properties sold.
Little relief is expected for Calgary’s top-tier market leading into 2020 given persistently weak oil prices, inconsistent consumer confidence and incremental projected GDP gains. With a challenging environment anticipated well into 2020, comprehensive local and international marketing programs, as well as non-traditional sales models such as the use of exclusive auction partners, will remain imperative to selling luxury homes in the region.
Greater Toronto Area
In spite of an extended winter that slowed the start of the spring real estate cycle, consumer confidence and activity in the Greater Toronto Area’s (Durham, Halton, Peel, Toronto and York) top-tier real estate market flourished in 2019, buoyed by strong population gains, healthy economic performance and a robust labour market. Demand for premier real estate was strong relative to available listings, creating tighter market conditions and sparking multiple offer scenarios. Overall, active sellers’ market conditions prevailed across all top-tier housing types, particularly within the City of Toronto.
In contrast to the market contraction experienced in 2018 following the introduction of tighter mortgage lending policies on the heels of the 2017 unveiling of the Ontario Fair Housing Plan, the Greater Toronto Area’s $1 million-plus residential real estate market (condominiums, attached and single family homes) experienced a 23% year-over-year increase in sales activity with 17,532 homes sold in 2019. As property owners sought privacy from new transaction transparency, luxury sales continued to migrate away from Multiple Listings Service (MLS) towards exclusive sales and marketing platforms. As a result, annual sales over $4 million tracked on MLS reflected a 3% decline to 228 properties sold. Top-tier real estate sales within the City of Toronto continued to see activity escalate in 2019. Between January 1– December 31, 2019, 7,877 $1 million-plus properties sold, a 20% increase from 2018, while $4 million-plus luxury real estate sales on MLS increased 5% year-over-year to 178 units sold.
While $1 million-plus sales activity revitalized by mid-2019, real estate consumer and industry confidence continued to build momentum through the last half of the year. From July 1–December 31, 2019, the GTA’s $1 million-plus real estate market saw a 36% year-over-year increase in sales with 8,920 properties sold, while luxury real estate sales over $4 million were up 17% to 125 units sold. Sales in the last half of 2019 in the City of Toronto mirrored this positive trajectory. Between July 1–December 31, 2019, sales over $1 million increased a healthy 28% year-over-year to 3,885 properties sold while sales over $4 million increased 14% to 89 units sold.
In the GTA, top-tier condominium sales for 2019 reflected a healthy and strengthening market. While sales over $1 million in 2018 had contracted a mild 3% from 2017 levels due largely to muted performance in the first quarter, the GTA $1 million-plus condominium market saw a 16% annual increase in sales activity to 1,464 units sold in 2019. However, $4 million-plus condo sales on MLS were down 41% year-over-year from 17 units sold in 2018 to 10 units in 2019, due partly to the shift in ultra-luxury real estate sales to exclusive channels. The City of Toronto’s $1 million-plus condominium market also resurged in 2019 with a 16% year-over-year increase in sales activity to 1,313 units sold in 2019.
Top-tier attached homes remained one of the GTA’s most coveted housing types in 2019, as a diverse cross-section of buyers competed for limited inventory. While GTA attached home sales over $1 million had increased 36% in the last half of 2019 compared to the same months in 2018, the region’s $1 million-plus attached home market saw a 29% increase year-over-year to 1,958 homes sold in 2019. Thriving demand resulted in brisk sales and a notable 52% of $1 million-plus attached homes selling above list price in the last half of the year. Luxury $4 million-plus attached home sales remained on par with 2018 levels at six homes sold in both years. The City of Toronto’s $1 million-plus attached home market experienced an impactful 31% increase in year-over-year sales volume with 1,707 homes sold in 2019, while sales of $4 million-plus attached luxury homes remained on par with 2018 levels at six units sold.
The GTA top-tier single family home market gained steady traction in 2019. While sales over $1 million in the latter half of 2018 had reflected a nominal 2% year-over-year gain from the last half of 2017, the GTA’s $1 million-plus single family home market saw a 23% increase year-over-year to 14,110 units in 2019. Luxury single family home sales over $4 million saw a negligible change in sales volume from 211 sold in 2018 to 212 sold in 2019. The City of Toronto’s $1 million-plus single family home market experienced an 18% year-over-year gain in annual sales activity with 4,857 homes sold in 2019, while luxury sales over $4 million on MLS increased 11% to 162 homes sold.
According to the Conference Board of Canada, Toronto is projected to follow its 2% increase in GDP in 2019 with a 2.2% growth rate in 2020. Furthermore, population gains are expected to place unrelenting pressure on conventional and top-tier housing demand as Ontario recorded one of its highest population growth rates in 30 years in 2018/2019 with Toronto acting as a key gateway for newcomers drawn to a city ranked seventh in the Economist Intelligence Unit’s Global Liveability Index in 2019.
These underlying influences, coupled with continued international and local investor interest, are expected to propel the GTA’s top-tier real estate market to new levels of activity and pricing into the first quarter of 2020.
The City of Montreal’s top-tier real estate market achieved new records in 2019, as the city saw strong increases in sales volume and pricing while inventory levels remained limited in premier neighbourhoods. Exceptional sales gains were experienced in the luxury $4 million-plus segment of the real estate market, while the top-tier condominium market saw a record-setting 2019. Overall, sales of $1 million-plus real estate (condominiums, attached and single family homes) increased 13% to 995 units sold in 2019, as the city continued to attract new attention as a global luxury real estate destination.
Montreal’s luxury new and resale condominium market soared in 2019 as end-user and investor demand for high-end, high-density housing market strengthened, and as the city’s skyline evolved with the addition of new development. For the first time in its history, condominiums comprised over 20% of residential real estate sales over $1 million in the city. Overall, Montreal’s top-tier $1 million-plus condominium market saw a 39% increase year-over-year with 219 units in 2019. Luxury $4 million-plus condominium sales increased from one unit sold in 2018, to two units sold in 2019.
Following several consecutive years of sales gains which saw single family home sales over $1 million increase 21% from 2016 to 2017 and another 8% from 2017 to 2018, the top-tier $1 million-plus single family home market in Montreal moderated with a modest 3% decrease to 423 homes sold in 2019. However, significant gains were experienced in the luxury $4 million-plus market, which saw sales increase 60% year-over-year to 16 home sales compared to 10 homes in 2018. Montreal’s top-tier attached home market also experienced an uptick in sales activity in 2019, with sales of homes over $1 million experiencing a 22% increase to 353 homes sold in 2019.
Strengthening economic fundamentals and unprecedented population gains are fueling Montreal’s real estate boom. The Conference Board of Canada confirmed that Montreal led the nation’s major metropolitan areas in economic growth in 2019 at a rate of 3%, due to strong performance across key industries including manufacturing, finance, insurance and real estate. Between 2018 and 2019, Quebec also experienced its largest population increase in three decades.
These factors translated into a growing consumer base with a positive inclination for Montreal’s top-tier real estate in 2019 and will continue to underpin healthy market performance into the first quarter of 2020.
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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.
Talk Shop Media Maxine Jakubke 604.738.2220 Maxine@talkshopmedia.com