TORONTO, March 30, 2021 (GLOBE NEWSWIRE) -- Canada’s metropolitan luxury real estate markets are undergoing an unprecedented phase of evolution and expansion, according to Sotheby’s International Realty Canada. One year following the inception of the COVID-19 pandemic, the compounding effects of dramatic changes in the housing preferences of affluent Canadians, new demands across multiple generations of homeowners and buyers, significant cash accumulation, easy access to borrowing, and pent-up local and international demand, are rippling across the market. With sales activity and price gains accelerating across major cities across the country as a result, strong performance is projected this spring.
The latest data compiled by Sotheby’s International Realty Canada reveal that the Greater Toronto Area (GTA) is poised to see strong gains in the coming months. Residential real estate sales over $4 million spiked 157% year-over-year in the first two months of 2021; of these, five ultra-luxury properties sold over $10 million compared to one property sold in this price range during the same period of 2020. During this time, luxury single family home sales over $4 million rose 203% year-over-year. Meanwhile, the region’s luxury condominium market reflected resilience, and early March data reflects a segment poised to gain ground. While sales of luxury condominiums over $4 million were down year-over-year from six to two units in the first two months of 2021, March 1–15 sales were on par with previous year’s levels at one unit sold. Furthermore, sales in the first 15 days of March underscored the strength of the GTA’s $1 million-plus condo market sales, as sales increased 110% year-over-year.
Vancouver’s luxury market gained significant momentum leading into spring as residential real estate sales over $4 million increased 41% year-over-year in the first two months of 2021. One property sold over $10 million during this period, where none had sold in this price range in the same months of 2020. Single family home sales over $4 million increased 29%, with one ultra-luxury home sold over $10 million. Confidence and activity also rebounded in the luxury condominium market, as sales over $4 million increased 75% to seven units sold in January and February. Residential real estate sales over $4 million between March 1–15 suggest steep gains to come in the spring, as sales soared 175% to 11 properties sold, with one of these above $10 million.
The first two months of the year also saw strengthening high-end residential real estate sales in metropolitan areas where the price threshold for luxury real estate is more accessible. In Montreal, sales over $1 million rose 27% year-over-year, with two properties selling over $4 million compared to three sold in this price range in the first two months of 2020. Of these, one ultra-luxury property sold over $10 million where there had been no transactions in this price range at the same time last year. Sales in the city’s $1 million-plus single family market increased 30% year-over-year, while condominium sales over $1 million remained stable from 2020’s highs in the first two months of 2021, with a nominal 4% year-over-year contraction. However, one of these condominium sales was of a penthouse condominium by Sotheby’s International Realty Quebec, which set a historic record for the province. Residential real estate sales over $1 million in the first 15 days of March also indicate an active spring ahead, as sales climbed 93% year-over-year.
Calgary’s luxury residential real estate market also emerged from previously entrenched buyers’ market conditions. Residential sales over $1 million more than doubled at a rate of 119% year-over-year in the first two months of 2021, as the market-dominant single family home segment saw sales increase 125%. However, excess supply and soft demand continued to weigh on the city’s luxury condominium market which saw one condominium sold over $1 million in the first two months of 2021.
“Canada’s luxury real estate market is undergoing a dramatic transformation as a result of the pandemic. Many of these changes will not only inspire spring sales activity but have long-lasting impact on real estate demand in our country,” says Don Kottick, President and CEO of Sotheby’s International Realty Canada. “As a company, we are seeing foundational changes in the home and lifestyle preferences across every generation of Canadian, and a level of willingness to invest in home buying and renovation that will permanently improve the quality of housing stock, and therefore prices. We are forecasting multiple waves of consumers in the coming months, both local and international, who have a desire for Canadian real estate ownership that has never been stronger. Most importantly, these potential buyers have unprecedented access to cash and low-cost borrowing that will enable them to engage in the market in months to come.”
According to Kottick, Canada’s metropolitan luxury real estate market is primed for healthy spring performance, and in most markets, the ceiling for sales activity will be capped by lack of inventory rather than consumer demand.
Key Influences
Home Renovations Bolster Luxury Price Gains
Canadian home renovation activity, which is forecast to rebound to $80 billion in 2021 following a scant pullback of 5.2% from 2019 levels last year according to a recent Altus Group Housing Report, is supporting short- and long-term price gains across the country’s major metropolitan real estate markets. While research released in Sotheby’s International Realty’s global 2021 Luxury Outlook revealed that luxury buyers typically prefer turnkey properties that are move-in ready and require no renovations, the pandemic has also driven high-end homeowners to enhance their living spaces with discretionary renovations to enrich their lifestyle and enable work, entertainment and socializing. Common luxury home renovations have included the enhancement of outdoor space with gardens and landscaping, patio and deck upgrades, outdoor kitchens and dining areas, outdoor theatres, waterfront docks, and personal sports facilities such as pools and ball courts and children’s play amenities. Interior renovations have included kitchen upgrades, reconfiguration of space to accommodate home offices, and the addition of theatres, and personal fitness and wellness facilities.
Lack of luxury real estate inventory in Toronto, Montreal and Vancouver is amplifying this renovation trend. According to Sotheby’s International Realty Canada experts, prospective homebuyers are now more likely to be willing to purchase properties that require repairs and updates due to a lack of other options in their desired neighbourhoods. Others are purchasing luxurious move-in ready properties and renovating to meet bespoke personal preferences. While this renovation trend is largely driven by end-users, market confidence is also motivating investment-minded buyers to purchase homes for renovation in anticipation of future resale at a higher price.
With renovations elevating the overall quality of housing stock in these metropolitan areas, the short- and long-term market value of luxury housing across Canada’s major real estate markets is expected to rise through the spring and in the long term.
Multi-Generational Influences on Luxury Single Family Home Market
Across multiple generations of homeowners and homebuyers, dramatic changes in housing and lifestyle preferences are heightening demand and simultaneously reducing single family housing supply on the resale market.
Released in early March 2020 prior to the pandemic, Mustel Group and Sotheby’s International Realty Canada’s “Generational Real Estate Trends Report: Aging in Place” revealed that while 86% of baby boomers/older adult homeowners in Canada’s key metropolitan areas wanted to live in their current home for as long as possible, 36% were likely to sell their current home and move to a new primary residence within their lifetime. According to survey results, 54% of those with plans to sell their current home and move to a different primary residence expected to move into a condominium, 29% expected to move into a single family home while 18% anticipated moving into an attached or duplex/triplex unit.
Due to public health concerns following the start of the pandemic, the preferences of this influential generation have evolved. According to Sotheby’s International Realty Canada experts, baby boomers/older adult homeowners are accelerating plans to achieve their ideal primary residence and are now more likely to opt for a personal single family home for this purpose. Some are re-evaluating the benefits and perceived risks of higher density housing and their common amenities and facilities. While some baby boomers/older adults are relocating to outlying suburban or recreational regions to achieve more space, others who already own single family homes in their desired neighbourhoods are choosing to renovate with the intent of living there for as long as possible given the current shortage of housing options available for sale.
This increased desire to “age in place” is expected to constrict supply at a time when demand for single family homes from Millennial homebuyers is at an all-time high given new pandemic preferences. According to a pre-pandemic 2018 survey by Mustel Group and Sotheby’s International Realty Canada, 83% of “modern family” homeowners aged 20 – 45 in Canada’s key metropolitan areas would prefer living in a detached single family home, even though just over half (56%) had actually purchased one. With the pandemic, the preference for single family home living amongst young families has soared as the need to accommodate working and studying at home, as well as preference for home recreational and entertainment space increased.
According to Sotheby’s International Realty Canada experts, the pandemic has not only increased demand for single family homes amongst young families, it has created demand across the full spectrum of young first-time homebuyers regardless of family stage, who may previously have opted for a condominium but are now seeking a single family home instead. Motivated by a “fear of missing out” on single family home ownership, affluent young buyers are being enabled by low mortgage rates, newfound prioritization of home ownership over discretionary lifestyle expenses already reduced by pandemic restrictions, and most notably, the accelerated generational transfer of an estimated $1 trillion in personal wealth from Canadian baby boomers to their children since the pandemic.
Given changing preferences across multiple generations of home buyers and homeowners, limited supply and elevated demand will bolster prices and activity across Canada’s largest single family home markets this spring and into the foreseeable future.
Urban Luxury Condominium Demand Resurges in Toronto, Vancouver, Montreal
Luxury condominium sales tapered across Canada’s metropolitan housing markets in 2020 following the pandemic’s inception, as real estate consumers sought more space through urban, suburban and recreational single family homes purchases.
Preliminary 2021 data and market insight from Sotheby’s International Realty Canada experts reveal that this softening was transitory. Luxury condominium sales activity is experiencing a significant renewal, with multiple offers and brisk sales the new norm for Toronto and Vancouver. Montreal’s high-end condominium market also balanced in the first two months of the year, as sales over $1 million rebounded to 2020’s record highs, while Sotheby’s International Realty Quebec’s sale of a penthouse condominium at The Ritz-Carlton Residences in Montreal set a new record as the highest priced condominium sale through the MLS® (Multiple Listing Service) system in Quebec’s history.
With the prospect of widespread vaccine availability in Canada this year, local consumer demand and both Canadian and international investor confidence in the luxury condominium market is rebounding. Depleted inventory and steep price gains in metropolitan single family home markets is also pressing homebuyers to purchase large condominiums out of necessity and a sheer lack of alternatives. Furthermore, a “second wave” of real estate buying is taking place in metropolitan luxury condominium markets as those who moved further afield during the pandemic are now returning to buy condominiums as secondary homes, pied-à-terres and investment properties within city centres. This revitalized consumer demand and confidence positions the Toronto, Vancouver, Montreal condominium luxury condominium markets for steady gains through the spring.
Pent-up Cash, Financial Market Turbulence to Stimulate Luxury Demand
The significant accumulation of cash by mid- and high-income Canadian households during the pandemic is poised for release into the economy as a whole, and the real estate market specifically in the spring and summer of 2021, reinforcing continued demand. According to a report released by CIBC in November 2020, COVID-19 triggered the largest cash accumulation of cash in recorded history, with households and businesses holding over $170 billion in excess cash, the majority of which is in the accounts of mid- and high-earning households. With low interest rates discouraging cash accumulation, CIBC has predicted the deployment of cash in the spring and summer of 2021 through consumer spending, financial investment, real estate and intergenerational wealth transfer.
At the same time, according to Sotheby’s International Realty Canada experts, significant and ongoing volatility in major stock indices in 2020 on the heels of a decade-long bull-market has propelled affluent real estate consumers to purchase real estate to diversify asset portfolios, hedge against inflation, buffer against stock market uncertainty and leverage historically low mortgage lending rates. For the past few years, affluent real estate consumers have been investing more into primary home purchases, buying multiple properties for vacation and investment, upsizing their real estate choices, and in the case of baby boomers and older adults, reinvesting proceeds from home sales into a new property for themselves or their children rather than exiting the housing market. These trends have only been magnified through the course of the pandemic, with the outflow of pent-up cash reserves to ignite new buying activity in the coming months.
Global Flight of Human and Financial Capital to Canadian Real Estate
Restrictions on global travel limited international purchasers of Canadian real estate in 2020. However, an upswing in the volume of international enquiries on luxury property listings in Toronto, Montreal and Vancouver in the preliminary months of 2021 reveal that underlying demand has not dissipated and is set to resurge in the seasons ahead.
Canada aims to welcome 401,000 new permanent residents in 2021 the majority of which will be absorbed into the country’s major metropolitan areas of Montreal, Toronto and Vancouver, introducing new demand for conventional and high-end housing into these markets.
In addition to the influx of permanent residents and new immigrants, Canada will be the beneficiary of the repatriation of wealth to Canada from citizens currently living abroad who are seeking the comparable security of investment into the Canadian lifestyle and the country’s real estate. According to a 2010 report by the Asia Pacific Foundation of Canada and the Canadian Expat Association, 2.8 million Canadian citizens were living abroad, with the greatest number in the United States, and with regions such as Hong Kong, France and the UK amongst the leading destinations for Canadian living abroad. Since the start of the pandemic, Sotheby’s International Realty Canada has noted a marked increase in luxury real estate purchases by such Canadians seeking a path to return, or a secondary residence to enjoy.
Furthermore, as an international beacon representing stability, security and safety, Canadian real estate continues to be well-positioned as a destination for foreign investment and asset diversification for high and ultra-high net worth investors worldwide.
Although the pandemic has seen international buyers purchasing luxury Canadian properties either entirely virtually, or in some cases, sight unseen, many are also awaiting the reopening of borders to enable tangible visits to view and buy properties. The imminent release of this pent-up international demand is set to spur additional sales activity across the conventional and luxury markets in the country’s major metropolitan areas this spring.
Top-Tier Market Outlook: Spring 2021
Vancouver
Luxury real estate sales spiked dramatically in the City of Vancouver in early 2021, as affluent homebuyers sought to optimize their homes, living spaces and lifestyles in response to the COVID-19 pandemic. While the momentum in sales activity and price gains soared across all housing types and price ranges, data from the preliminary months of the year foreshadow bold and potentially unprecedented gains in the city’s luxury and ultra-luxury real estate market this spring.
As the Real Estate Board of Greater Vancouver reported heated sellers’ market conditions as overall residential home sales in Metro Vancouver increased 56% year-over-year in January 2021 and 73% year-over-year in February 2021, pent-up demand surged in the City of Vancouver’s luxury market. Urged on by low interest rates, restored market confidence and changing housing preferences given the evolution of lifestyle needs resulting from the pandemic, affluent buyers and sellers previously sidelined in 2020 due to the pandemic flooded into the market, propelling sales activity above pre-COVID levels.
Luxury residential real estate sales over $4 million (condominiums, attached and single family homes) increased 41% year-over-year to 45 properties sold in the first two months of 2021; one property sold over $10 million during this time, where none had sold in this ultra-luxury price range during the same period in 2020. Luxury property sales between $2–4 million increased 57% year-over-year to 193 properties sold. The sale of properties between $1–2 million experienced year-over-year gains of 52% to 527 properties sold. Overall residential real estate sales over $1 million were up 53% to 765 properties sold in the first two months of the year.
Residential real estate sales over $4 million in the first 15 days of March foretell significant gains for the city’s luxury market this spring, as sales soared 175% to 11 properties sold, with one of these sold over $10 million compared to zero transactions above this price point in the same period last year. $2–4 million luxury real estate sales increased 86% year-over-year to 52 properties sold. Sales between $1–2 million surged 129% to 142 properties sold during this time. Residential $1 million-plus sales experienced a 118% gain to 205 properties sold overall during this period.
As in the case for Canada’s largest metropolitan real estate markets, the City of Vancouver experienced its strongest resurgence in luxury consumer demand within the single family home segment, as heated bidding wars became pervasive, qualified property enquiries from local and international buyers increased, and increased sales velocity for the city’s most extraordinary luxury homes dramatically reduced the days on market before a property was sold. In the first two months of the year, luxury single family home sales over $4 million increased 29% to 36 homes sold, with one home sold over $10 million compared to zero during the same period in 2020. Single family home sales between $2–4 million increased 65% to 162 homes sold. Conventional home sales between $1–2 million increased 33% to 179 units sold. Overall, $1 million-plus single family home sales were up 44% year-over-year to 377 homes sold, as the benchmark price for a single family home in Vancouver West and Vancouver East rose 8.5% and 9.5% year-over-year respectively to $3,203,200 and $1,565,800 in February 2021. Luxury single family home sales in the first 15 days of March also indicate that monumental gains lie ahead this spring, as sales over $4 million more than doubled year-over-year to nine homes sold from four in the same period of 2020. Of these, one ultra-luxury home sold over $10 million compared to none during this period in 2020. The $2–4 million segment rose 50% year-over-year to 39 homes sold, while $1–2 million home sales were up 100% to 56 homes sold in the first 15 days of March. Overall, $1 million-plus single family home sales from March 1–15 were up 79% year-over-year to 104 homes sold.
The city’s luxury attached home market also strengthened in the first two months of the year. Two luxury attached homes sold over $4 million where there had been no transaction in the same months of 2020. $2–4 million and $1–2 million attached home sales were each up 88% year-over-year, with 15 and 169 homes sold respectively. Overall, 186 attached homes sold over $1 million in January and February 2021, up 90% year-over-year. In the first 15 days of March, seven $2–4 million attached homes sold compared to zero sold in the same period in 2020, while $1–2 million attached homes increased 106% year-over-year to 33 homes sold. With overall $1 million-plus attached home sales up 150% year-over-year in the first 15 days of March to 40 homes sold, spring activity in this coveted high-end housing segment is poised to see gains into the spring.
While the resurgence of Vancouver’s luxury condominium market lagged behind that of the single family and attached home segments, confidence in the sector renewed in the first two months of 2021. Over the course of January and February, luxury condominium sales over $4 million increased 75% to seven units sold, pulling ahead of 2020 pre-pandemic levels. $2–4 million sales contracted a nominal 6%, or one unit, year-over-year to 16 units sold, while $1–2 million condominium sales rose 48% year-over-year to 179 units sold. Overall condominium sales over $1 million increased 42% year-over-year to 202 units sold in January and February 2021. Luxury condominium sales in the first 15 days of March point to strengthening demand and confidence: two condos sold over $4 million where there had been no transactions during this period in 2020, while $2–4 million sales rose from two to six units sold. Meanwhile, condominium sales from $1–2 million surged 194% to 53 units sold in the first 15 days of March, bringing total condominium sales over $1 million to 61 units sold, a significant 205% year-over-year gain.
The swift resurgence of luxury real estate sales in the City of Vancouver reveals that local demand for urban living remains resilient despite the pandemic, even as migration towards high-end suburban living is a concurrent trend. Furthermore, a notable increase in international enquiries on luxury Vancouver properties in recent months indicates that an influx in buying activity from expatriates, new Canadians and permanent residents is inevitable as soon as borders reopen. Local and global confidence in the luxury real estate market of a city ranked as one of the most liveable cities in the world will continue to accelerate sales activity and prices into the months ahead.
Calgary
Following several years of deeply entrenched buyers’ market conditions across the City of Calgary’s conventional and luxury real estate markets, favourable mortgage lending rates, tight inventory, renewing consumer confidence, and the release of pent-up and newly realized local demand given changing lifestyle needs brought on by COVID-19, have created what Sotheby’s International Realty Canada experts characterize as “true market” conditions for the city’s $1 million-plus luxury real estate for spring 2021. Supply released into the market from motivated sellers pricing to current market realities is being met by buyers equally motivated to transact this spring, resulting in increased sales activity in the months ahead.
According to the Calgary Real Estate Board, total residential real estate sales in the City of Calgary rose 49% in the first two months of the year as supply constraints drove gains in the benchmark price of single family, semi, row and condominium properties up by 4%, 2%, 1% and 0% respectively. However, year-over-year price gains in the month of February of 5%, 4%, 1% and 1% respectively, as well as annual sales gains of 54%, have pointed to strengthening market conditions across the conventional market.
Luxury residential real estate sales over $1 million (condominiums, attached homes and single family homes) experienced steeper increases in sales activity. In the first two months of 2021, 125 properties sold over $1 million, up 119% from the same period in 2020. Of these, 114 properties sold between $1–2 million, up 128% year-over-year, and 11 units sold between $2–4 million, a 57% year-over-year gain. As in 2020, there were no transactions above $4 million in the first two months of the year.
Luxury sales activity continued to climb in the first 15 days of March, as $1 million-plus residential sales increased 123% year-over-year to 49 properties sold. 41 properties sold between $1–2 million, up 128% year-over-year, while eight units sold between $2–4 million, a 100% year-over-year increase.
Single family home sales comprised over 90% of Calgary’s overall $1 million-plus market activity in the first two months of 2021, during which sales over $1 million rose 125% year-over-year to 117 homes sold. 107 homes sold between $1–2 million, up 138% year-over-year, while ten homes sold between $2–4 million up 43% year-over-year. Sales over $1 million from March 1–15 foreshadow healthy activity this spring, as sales increased 123% to 49 homes sold. During this time, 41 homes sold between $1–2 million, up 128% year-over-year, and eight homes sold between $1–2 million, double the four units sold during this time in 2020. Healthy activity at prices calibrated for current conditions is encouraging sellers to re-engage in the luxury and ultra-luxury market while drawing local and global interest in the process.
Attached home sales over $1 million increased 75% in the first two months of 2021 to seven homes sold. Six homes sold between $1–2 million, up from four units sold during the same period in 2020, while one unit sold between $2–4 million, up from zero sold in the first two months of 2020. As in the same period in the previous year, attached home sales over $1 million were quiet in the first fifteen days of March.
Significant excess supply and slackening demand weighed on Calgary’s luxury condominium market activity and pricing, as local luxury buyers continue to veer strongly in favour of single family homes. As in 2020, one condominium sold over $1 million in the first two months of 2021, while $1 million-plus sales remained quiet between March 1–15, as was the case during this period of 2020. Market conditions will continue to skew strongly in favour of buyers and investors seeking opportunities in one of the most affordable luxury markets in Canada.
Greater Toronto Area (GTA)
Prior to the advent of COVID-19 in spring 2020, the Greater Toronto Area (Durham, Halton, Peel, Toronto and York) luxury real estate market was positioned for bold gains, with sales activity projected to surpass spring 2019 levels. The first two months of 2020 saw luxury $4 million-plus sales activity increase 75% year-over-year to 35 properties sold, reflecting rebounding demand across the GTA within and outside the city core. Sales between $2–4 million and $1–2 million rose 120% and 106% gains respectively, to 398 and 2,673 properties sold in January and February 2020.
One year later, the region is once again poised for significant gains across the conventional and luxury markets, as consumer and industry confidence continue to rally following last year’s uncertainty, and as significant shifts in pandemic housing, work and lifestyle needs ignite consumer movement across the housing market. While a shift in preference to single family homes and access to outdoor space has been a key activity driver, propelling migration to suburban and recreational regions, demand across all housing types is strong, as people make changes to align their homes to new housing needs.
While overall GTA sales increased 52.5% in February 2021 according to the Toronto Real Estate Board, and the average selling price increased 14.9% to $1,045,488, luxury sales activity also resurged above pre-pandemic levels and is surpassing the performance of the conventional market in several premier neighbourhoods.
GTA market performance in the first months of 2021 predicts a heated spring market with accelerating sales and price gains. Intense demand for high-end housing, coupled with an extreme supply shortfall is driving widespread bidding wars across the luxury market, propelling price increases and rapid sales. Luxury residential real estate sales over $4 million (condominiums, attached and single family homes) increased 157% year-over-year to 90 properties sold in the first two months of 2021. Of these, five ultra-luxury properties sold over $10 million compared to one property sold in this price range during the same period of 2020. Sales between $2–4 million and $1–2 million each experienced 126% gains to 901 and 6,038 properties sold respectively. Overall sales over $1 million were up 126% in the first two months of the year to 7,029 properties sold.
Luxury real estate sales continued to surge across the GTA over the first 15 days of March, with a 193% increase to 41 properties sold over $4 million during this time. Of these, three ultra-luxury $10 million-plus properties sold compared to two units sold in this price range during this time last year. $2–4 million and $1–2 million sales rose 192% and 141% year-over-year to 400 and 2,658 properties sold in the first 15 days of March 2021 respectively. Overall real estate sales above $1 million during this period surpassed previous year’s levels by 147% at 3,099 properties sold.
The City of Toronto’s luxury real estate market continued to reflect strong activity in the early months of 2021, foreshadowing a robust spring market. Residential real estate sales over $4 million (condominiums, attached and single family homes) rose 64% year-over-year to 41 properties sold in the first two months of 2021; out of these three ultra-luxury homes sold over $10 million, while none were sold in this price range during the same period in 2020. High-end sales between $2–4 million increased 39% to 373 units sold, while sales between $1–2 million experienced a 62% gain to 1,524 properties sold. Luxury sales accelerated over the first 15 days of March as sales above $4 million increased 136% to 26 properties sold. Out of these, one ultra-luxury property sold over $10 million, compared to two sold at this price range during the first 15 days of March 2020. $2–4 million and $1–2 million sales increased 81% and 84% year-over-year respectively to 161 and 737 properties sold in the first 15 days of March 2021. Overall, the City of Toronto’s $1 million-plus market saw 57% year-over-year gains to 1,938 properties sold in the first two months of 2021, and 84% gains to 924 properties sold over $1 million in the first 15 days of March.
As in the case of Vancouver, Calgary and Montreal, the GTA’s luxury single family home market saw the greatest onslaught of demand from affluent consumers following the pandemic’s inception. In the first two months of 2021, sales over $4 million rose 203% from the same period in 2020 in the GTA and 105% in the City of Toronto to 88 and 39 homes sold respectively; $10 million single family homes increased from one to five sold in the GTA and from zero to three homes sold in the City of Toronto. Single family home sales between $2–4 million and $1–2 million increased 143% and 120% to 833 and 4,713 homes sold in the GTA. In the City of Toronto, $2–4 million and $1–2 million sales rose 43% and 74% to 308 and 892 homes sold. Overall GTA and City of Toronto single family home sales over $1 million were up 124% and 65%, to 5,634 and 1,239 homes sold.
This trajectory continued in the first 15 days of March, as 40 luxury single family homes sold over $4 million in the GTA, up 208% from the same period in 2020, while City of Toronto $4 million-plus sales rose 150% to 25 homes sold. Three of these sales were of ultra-luxury $10 million-plus homes in the GTA, up from two units sold in this price range during this period in 2020. One of the single family home sales over $10 million was located in the City of Toronto, compared to two sold in the city above this price over the same weeks of 2020. Single family home sales between $2–4 million and $1–2 million rose 192% and 133% to 365 and 2,052 homes sold in the GTA; in the City of Toronto $2–4 million and $1–2 million sales rose 73% and 80% to 133 and 427 homes sold. Overall GTA and City of Toronto single family home sales over $1 million were up 141% and 81%, to 2,457 and 585 homes sold in the first 15 days of March.
Sales data from the preliminary months of 2021 also reflect a vigorous luxury attached home market, with activity limited only by the absence of inventory. While lack of supply resulted in no attached home transactions over $4 million in January and February, luxury attached home sales between $2–4 million increased 132% year-over-year in the GTA and 116% in the City of Toronto to 44 and 41 homes sold. GTA $1–2 million attached home sales increased 287% to 998 units sold during this time and rose 107% to 373 units sold in the City of Toronto specifically. Overall GTA and City of Toronto attached home sales over $1 million were up 276% and 108%, to 1,042 and 414 homes sold in the first two months of 2021.
Luxury attached home sales from March 1–15 reinforced this trend. While no sales over $4 million had yet transacted, sales between $2–4 million were up 110% to 21 sold across the GTA, while City of Toronto sales increased 90% to 19 homes sold. $1–2 million attached home sales rose 210% to 449 units sold in the GTA and 98% to 182 homes sold in the City of Toronto. Overall, $1 million-plus GTA and City of Toronto attached home sales increased 203% and 97% year-over-year respectively, to 470 and 201 homes sold in the first 15 days of March.
The GTA luxury condominium market remained resilient in the initial months of 2021, and early March data reveals a segment that is poised to gain ground in the coming months. While consumer demand for luxury single family homes eclipsed that for condominiums in the latter months of 2020, high-end condominium sales activity is experiencing a notable spring renewal according to Sotheby’s International Realty Canada experts, with bidding wars and brisk sales the new norm. Demand is resurging as consumer confidence in luxury condominium living rises with the prospect of broad vaccine availability in Canada, and as the lack of inventory in the single family and attached home markets channel homebuyers into higher density housing. Additionally, the desire for the convenience and vibrancy of city living from those who have relocated to the suburbs or recreational areas is translating into additional purchases of luxury condominiums as secondary homes in the city core. While sales of luxury condominiums over $4 million were down year-over-year from six to two units in the first two months of 2021, March 1–15 sales were on par with previous year’s levels at one unit sold. Further, while January–February sales between $2–4 million contracted 33% to 24 units sold, sales in this price range from March 1–15 were up 600% to 14 units sold compared to two sold during this time in 2020. GTA condominium sales between $1–2 million were up 20% year-over-year in the first two months of 2021 to 327 units sold but saw a more significant 99% gain in the first 15 days of March to 157 units sold. Overall GTA condo sales over $1 million were up 12% year-over-year in January and February to 353 units sold and up a significant 110% in the first 15 days of March to 172 units sold.
City of Toronto luxury condo sales reflected these trends. Luxury sales over $4 million were down from six to two units in the first two months of 2021 but remained the same as previous year’s levels from March 1–15, at one unit sold. Sales between $2–4 million contracted 27% year-over-year to 24 units sold in January and February but were up 350% to nine units sold compared to two sold during this time in 2020. City of Toronto condominium sales between $1–2 million rose 6% year-over-year in the first two months of 2021 to 259 units sold but experienced a greater 78% gain in the first 15 days of March to 128 units sold. Overall City of Toronto condo sales over $1 million in the first two months of 2021 were largely on par with the same months of 2020 at 285 units sold compared to 284 last year but experienced an 84% year-over-year surge in the first 15 days of March to 138 units sold. This upswing in high-end condo sales activity is expected to accelerate into the spring.
As Canada’s largest real estate market, and as the country’s leading destination for immigration, migration and international trade, the Greater Toronto Area is expected to see an additional influx in luxury real estate demand from Canadian expatriates, new immigrants and permanent residents, as well as international investors as soon as domestic travel restrictions and international borders relax. This, along with local consumer confidence and the strength of the region’s underlying fundamentals, positions the GTA luxury market for robust performance in the months ahead.
Montreal
Despite Level 4–Maximum Alert COVID-19 lockdown measures that restricted public mobility in the early months of the year, sales activity in the City of Montreal’s luxury and ultra-luxury real estate market outperformed even the region’s robust market for conventional housing, foreshadowing a strong market this spring.
Total residential real estate sales increased 4% in the first two months of the year in the Montreal Census Metropolitan Area according to the Quebec Professional Association of Real Estate Brokers, as supply constraints drove gains in the median price of single family home, condominium and -plexes up by 25%, 21%, 11% respectively.
At the same time, strong sales activity in the conventional market was surpassed in many instances by the performance of the City of Montreal’s luxury real estate market, which saw bidding wars, strong price gains and rapid absorption rate of limited premier inventory. Overall, residential real estate sales over $1 million (condominiums, attached and single family homes) increased 27% year-over-year to 237 properties sold in the first two months of the year. Although $1–2 million sales increased a healthy 23% to 190 properties sold, these gains were eclipsed by sales activity in the segment between $2–4 million which surged 55% to 45 properties sold in the first two months of the year. Two properties sold over $4 million compared to three properties sold in this price range within the first two months of 2020. Of these, one ultra-luxury property sold over $10 million on MLS where there had been no transactions in this price range at the same time last year. The sale of the penthouse condominium listed at $12.9 million at The Ritz-Carlton Residences in Montreal by Sotheby’s International Realty Quebec set a new benchmark as the highest recorded condominium sale through the MLS® (Multiple Listing Service) system in Quebec’s history.
Residential real estate sales over $1 million in the first 15 days of March also point to an active luxury market this spring, as sales surged 93% to 89 properties sold. $1–2 million sales increased 68% to 67 properties sold, while $2–4 million surged a significant 217% to 19 properties sold. While there had been no transactions above $4 million in the first 15 days of March 2020 prior to the inception of COVID-19, three properties sold over $4 million during this period in 2021.
With prospective home buyers demanding more living space given changing lifestyle needs brought on by COVID-19, top-tier single family home sales in the City of Montreal have been constrained by a shortfall of inventory. In spite of this, the city’s $1 million-plus single family home sales rose 30% year-over-year to 104 units sold in the first two months of 2020, while $1–2 million and $2–4 million home sales rose 25% and 59% to 76 and 27 homes sold respectively. Sales over $1 million in the first 15 days of March surged 147% year-over-year to 47 homes sold. While $1–2 million sales rose 76% to 30 homes sold, the luxury market climbed even more sharply as $2–4 million sales rose 600% to 14 single family homes sold. The city also saw the sale of three homes over $4 million between March 1–15, compared to no transactions above this price point during this period in 2020. The searing sellers’ market for luxury homes is anticipated to continue through the spring.
$1 million-plus attached home sales in the City of Montreal rose 49% year-over-year to 85 units sold in the first two months of 2021, with $1–2 million and $2–4 million attached home sales rising 40% and 140% to 73 and 12 homes sold respectively. As in 2020, there were no $4 million-plus attached home sales in the first two months of the year due to the lack of luxury supply. However, 28 attached homes sold over $1 million in the first 15 days of March, compared to 12 sold during the same period in 2020, a 133% increase. During this time $1–2 million and $2–4 million attached home sales increased 140% and 100% to 24 and 4 homes sold respectively.
Prior to the pandemic, Montreal’s $1 million-plus condominium market had seen consistent, robust gains in activity; sales in the first two months of 2020 over $1 million had climbed 92% from the same period in 2019 to 50 units sold. Following a temporary softening of the market in 2020, demand for high-end condominiums rebalanced in the latter months of 2020 and the preliminary months of 2021. Condominium sales over $1 million remained steady from 2020’s record highs in the first two months of 2021, with 48 units sold, down a nominal 4% from 50 units sold during the same period last year. Sales between $1–2 million comprised the bulk of activity and were consistent with previous year’s levels, with 41 units sold in January and February 2021 compared to 42 sales during the same months of 2020. $2–4 million condo sales also remained steady with six units sold in the first two months of 2021 compared to seven in 2020; likewise, $4 million-plus sales remained consistent from previous year’s levels at one unit sold. Sotheby’s International Realty Quebec’s record-breaking sale of The Ritz-Carlton Residences penthouse during this time revealed strong local, national and global appetite for Montreal’s most prestigious ultra-luxury properties. Steady performance in the first 15 days of March, during which condo sales over $1 million held steady from previous year’s levels at 14 units sold compared to 15 units sold in 2020, foreshadow a stable market ahead. During this time, 13 units sold between $1–2 million as in the same period in 2020, while one unit sold between $2–4 million, down from two in the first 15 days of 2020. Balanced market conditions are expected to continue this spring as the anticipated introduction of new inventory is expected to be met by demand from those priced out of the single family home market, as well as from those who have purchased luxury homes outside of the city now seeking secondary luxury properties convenient to Montreal’s city centre.
For more information on Sotheby's International Realty Canada and the 2021 Spring Top-Tier Real Estate Outlook, contact:
Talk Shop Media
Katie Stevens
778-686-0906
katies@talkshopmedia.com
About Sotheby's International Realty Canada
Combining the world's most prestigious real estate brand with local market knowledge and specialized marketing expertise, Sotheby's International Realty Canada is the leading real estate sales and marketing company for the country's most exceptional properties. With offices in over 30 residential and resort markets nationwide, our professional associates provide the highest caliber of real estate service, unrivalled local and international marketing solutions and a global affiliate sales network of approximately 1,000 offices in 71+ countries and territories to manage the real estate portfolios of discerning clients from around the world. For further information, visit www.sothebysrealty.ca.
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 for any loss or damage resultant from any use of, reliance on or reference to the contents of this document.
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