RE/MAX Canada says luxury home sales are booming by double-digits across Canada, but remain below the COVID-19-era peak.
Saskatoon had Canada’s fastest-growing luxury market in the first two months of 2024, the realtor says in a new report released on Tuesday. With luxury real estate starting at $700,000, RE/MAX says sales climbed more than 57 per cent versus 2023 due to a healthy economy, plus an influx of new Canadians and out-of-province buyers.
RE/MAX classifies homes that are twice the average residential price as luxury.
In Montreal, where luxury real estate starts at $2.5 million, sales grew 56 per cent. In Toronto and Vancouver, where luxury inventory costs north of $3 million, sales rose 14 per cent and three per cent, respectively.
“The upswing in luxury sales signal a return to overall health in the country’s major centers,” RE/MAX Canada president Christopher Alexander states in the report. “The ripple effect is already underway, with stronger home-buying activity at lower price points pushing sales into the upper end.”
Ottawa was the only city included in the report to book a decrease in luxury real estate sales. The number of transactions there fell eight per cent versus the first two months of 2023. RE/MAX says fewer homes in the nation’s capital were listed for sale at the top of the market early this year.
Nationwide, RE/MAX says strong equity gains, lower overall values, and downward-trending interest rates are supporting demand for luxury homes.
“Equity continues to play a significant role in the marketplace, driving demand at the top end of the market,” Alexander added. “Although overall gains have been elusive in recent years, a good percentage of buyers who purchased in 2018 and 2019 are well positioned to make their next moves.”
For example, RE/MAX estimates someone who purchased a home in the Greater Toronto Area in 2018 at an average price saw the value of their investment climb nearly 43 per cent by the end of 2023.
Foreign buyer activity falls
RE/MAX says the federal government’s ban on foreign ownership of Canadian real estate has had a “palpable” impact on the uber-luxe segment of major markets, as activity dropped “dramatically.” These markets include Metro Vancouver and Toronto, as well as the condo market in Montreal.
Last month, Ottawa announced a two-year extension of the ban, to Jan. 1, 2027.
“While the idea of a Foreign Buyer Ban sounds good in principle, it makes less sense in practice,” Alexander states. “The ban was originally intended to make a greater number of properties available to Canadians, and reduce upward pressure on housing values. The Bank of Canada’s 10 rate hikes were all that was needed to achieve that objective, all the while supply remains at historical lows.”
Young money
Luxury home-buying is skewing younger, according to RE/MAX. In Saskatoon, the report says young professionals working in the oil and gas industry are buying properties with acreage on the outskirts of urban areas. In larger cities, luxury condos are a popular choice.
RE/MAX say the luxury condo market is strongest in Metro Vancouver. Condo sales in that city climbed nearly 70 per cent in the first two months of 2024, according to the report.
Looking ahead, Alexander calls for thriving luxury real estate markets from coast-to-coast, barring an economic sea-change.
“Assuming a continuation of current economic fundamentals, momentum is set to climb at luxury price points,” he states.
“Demand is coming from a mix of high-income professionals/executives, retirees, empty-nesters, Gen X and millennials, newly landed immigrants, as well as large and multigenerational families – a good sign, as the diversity of buyers at the top end of the market today bodes well for its overall health in the future.”
Last month, a report by Royal LePage called for resurgent demand in Canada’s recreational housing market, following a post-pandemic slowdown in sales.
“Fundamental demand for recreational living has not abated,” said Royal LePage CEO Phil Soper. “Demand has been building quietly on the sidelines.”
Jeff Lagerquist is a senior reporter at Yahoo Finance Canada. Follow him on Twitter @jefflagerquist.
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