Canadian Condominium Coup


Abode2 explores how the luxury condominium sales boom leads to Toronto, Vancouver, and Montreal gains, as the sellers’ market conditions strengthen in Calgary

Against a backdrop of global turbulence, Canada’s luxury real estate market stood as a bulwark of strength in the first quarter of 2022. While scarce inventory continued to undermine prospective sales, the continued upswell of consumer optimism, economic revitalization, demand for housing mobility, and renewal of urban life bolstered top-tier sales across all major metropolitan areas in the initial months of the year, particularly in the market for condominiums over $1 million.

According to Sotheby’s International Realty Canada’s Top-Tier Real Estate: Spring 2022 State of Luxury Report, residential sales in Canada’s largest luxury real estate market continued to climb in the first quarter of 2022, following record-breaking performance in 2021. The robust performance of the Greater Toronto Area (Durham, Halton, Peel, Toronto and York) luxury market in the initial months of the year foreshadows strength across every residential housing segment through the spring market. Residential real estate sales (condominiums, attached and single family homes) over $4 million from January 1– March 31, 2022, increased 30% year-over-year with seven sales over $10 million, an adjustment from nine properties sold above this ultra-luxury price point in the first quarter of 2021. $4 million-plus condominium sales surged to lead the market with 160% annual gains, while single family home sales increased 24%. Four attached homes sold over $4 million where none had sold during this time in 2021. Overall, $1 million-plus residential sales saw annual gains of 11% in the first quarter of the year, led by condominiums which surged 120% compared to attached home gains of 79% and a 10% year-over-year decline in single family home sales over $1 million.

Top-tier condominium sales also dominated Vancouver’s $1 million-plus real estate market in the first quarter of 2021, as the city’s longstanding single family and attached home supply deficit channelled prospective buyers into high density housing. Between January 1– March 31, 2022, overall luxury residential sales over $4 million declined 14% from the same period in 2021, with three properties selling over $10 million on MLS in the first quarter of 2022 compared to six sold in the first quarter of the previous year. Residential sales over $1 million were down 10% year-over-year in the first quarter. While Vancouver luxury condominium sales over $4 million were up 8% year-over-year during this time, overall condominium sales above the $1 million mark increased a healthy 29%. As a result, 559 $1 million-plus condominiums sold, just shy of the 599 $1 million-plus single family homes sold in the first quarter of 2022. Frustrated by the city’s supply deficit, luxury single family home sales over $4 million, saw a 13% year-over-year decline, with three homes sold over $10 million on Multiple Listing Service (MLS) compared to six homes sold in the first quarter of 2021. Despite strong consumer demand, inadequate supply also depressed $1 million-plus attached home sales, which fell 16% from the first quarter of 2021.

Montreal’s top-tier real estate market moderated to more balanced conditions in the preliminary months of the year, as sales activity normalized from record-breaking gains in 2021. The city’s $4 million-plus residential real estate sales were up 140% in the first quarter of 2022 from the same period in 2021, while sales over $1 million balanced with a 6% annual increase. Notably, approximately one in three $1 million-plus residential sales were in the luxury condo segment. Condominium sales over $1 million also saw the greatest year-over-year percentage gains of the residential housing types at 73%, as $1 million-plus single family and attached home sales declined 11% and 8% year-over-year respectively.

Sellers’ market conditions continued to strengthen in Calgary in the first quarter of 2022, as local consumer optimism continued to rise along with the province’s steady economic recovery. Residential real estate sales over $1 million soared 82% year-over-year from the same period in 2021, while sales over $4 million increased to two sales where there had been no sales above this price in the same period last year. The city’s $1 million-plus single family and attached home sales rose a monumental 71% and 258% year-over-year respectively, while condominium sales over $1 million increased to seven properties sold between January 1–March 31, compared to two units sold in the same period in 2021.

“Across Canada's major metropolitan areas, we have seen extraordinary sales activity and consumer demand in the luxury condominium market this year, leaving no doubt that consumer and investor confidence in the downtown and urban market has been fully restored,” says Don Kottick, President and CEO of Sotheby’s International Realty Canada. “While there are lifestyle, family stage, financial planning and generational drivers behind the super-charged luxury condominium market, its strength also reflects the stark imbalance between strong demand and inventory challenges we are seeing across the real estate market overall. In Toronto and Vancouver in particular, heated market conditions and evaporating single family and attached home supply have left many potential buyers with condominiums as their best, and in some cases, only option. This will only fuel additional demand in the months ahead.”

According to Kottick, while major adverse events may instil anxiety in the top-tier market, Canadian real estate is regarded locally and globally as a safe haven in challenging times. As a result, Canada’s luxury market is poised for robust performance through spring, with the most realistic headwinds being the inadequate supply of housing, and the potential for demand-side government policy interventions to have unintended negative financial consequences for Canadian homeowners.

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