Spotlight on inventory once again, as
available homes listed for sale fall below tight pandemic
levels in key markets
TORONTO and KELOWNA,
BC, April 4, 2023 /CNW/ -- Growing demand for
residential properties has trickled into the upper-end of the
Canadian real estate market, with luxury sales posting gains in the
first quarter of 2023 over the fourth quarter of 2022 in most major
Canadian markets, according to the 2023 Spotlight on Luxury
Report released today by RE/MAX Canada.
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RE/MAX Canada examined 15 Canadian housing markets from
coast to coast -- including Greater
Vancouver, Fraser Valley, Kelowna, Calgary, Edmonton, Saskatoon, Winnipeg, Hamilton-Burlington, London-St.
Thomas, Greater Toronto
Area (GTA), Ottawa, Island
of Montreal, Halifax-Dartmouth, Moncton and St.
John's – and found rapid depletion in housing stock is
placing upward pressure on values at lower price points and
sparking an uptick in demand in the luxury segment. While upper-end
sales in the first quarter of 2023 have fallen short of peak levels
reached in Q1 2022, activity is on par or ahead of Q4 2022 figures
in 10 of the 15 markets surveyed. The ascending pattern is expected
to continue in the upcoming quarter, as both sales and temperatures
heat up. Saskatoon, underpinned by
strong economic fundamentals, bucked the national trend, with
luxury home sales exceeding Q1 2022 levels in Q1 2023.
"Much of the activity in the market can be attributed to pent-up
demand, which has been building since mid-2022," says Christopher Alexander, President of RE/MAX
Canada. "Bolstered by lower
fixed-term mortgage rates and attractive housing values, buyers are
taking advantage of this window of opportunity to secure home
ownership. Listings, however, are few and far between in most areas
of the country and finding the right home has proved
challenging."
Market
|
Luxury
|
Q1
2023*
|
Q4
2022
|
%
change
|
|
Price
Point
|
Sales
|
Sales
|
|
Greater
Vancouver***
|
$4,000,000
|
51
|
42
|
21.4 %
|
Fraser
Valley***
|
$3,000,000
|
30
|
25
|
20.0 %
|
Kelowna
|
$1,500,000
|
54
|
65
|
-16.9 %
|
Calgary (City
of)
|
$1,000,000
|
269
|
201
|
33.8 %
|
Edmonton
|
$1,000,000
|
40
|
57
|
-29.8 %
|
Saskatoon
|
$750,000
|
27
|
25
|
8.0 %
|
Winnipeg
|
$700,000
|
51
|
53
|
-3.8 %
|
Hamilton-Burlington
|
$2,000,000
|
43
|
31
|
38.7 %
|
London-St.
Thomas
|
$1,200,000
|
40
|
44
|
-9.1 %
|
Greater Toronto
Area
|
$3,000,000
|
261
|
251
|
4.0 %
|
Ottawa
|
$1,250,000
|
91
|
85
|
7.1 %
|
Island of
Montreal
|
$1,500,000
|
73
|
72
|
1.4 %
|
Halifax-Dartmouth
|
$1,000,000
|
42
|
37
|
13.5 %
|
Moncton**
|
$700,000
|
13
|
13
|
0.0 %
|
St. John's
|
$600,000
|
18
|
56
|
-67.9 %
|
|
Source: Based on local
board statistics provided by RE/MAX Brokers and Sales
Representatives. Luxury price points, typically 2x local average
price plus, are determine by RE/MAX Brokers and Sales
Representatives *Preliminary figures as of March 31st.
**Five of the 13 total sales are pending. ***Detached home sales
only.
|
Sidelined buyers jumped back into the market in Q1, as
anticipated inventory failed to materialize and housing values
stabilized, according to the RE/MAX Canada 2023 Spotlight on Luxury Report.
Supply levels are now tighter than they were during the pandemic in
some markets. In the Fraser Valley, for example, listings recently
hit a 30-year low and, in St. John's,
Newfoundland, a property recently listed for sale at the
$800,000 price point experienced 15
showings and three offers and sold on its first day on the
market.
"Inventory continues to be the lynchpin of the Canadian housing
market," explains Alexander. "The pattern of heating and cooling
housing markets emerges time and time again, and it is directly
linked to our issues with supply and the inability of governments
at all three levels to get shovels in the ground across our nation,
which is now approaching 40 million people in population. We
welcome the news that our country is growing, but with one million
new Canadians added in 2022, we also need to be certain that
adequate housing, not to mention vital infrastructure, is in place
to support the influx of newcomers."
A lack of available homes listed for sale have served to prop-up
housing values across the country, despite softer overall demand,
explains Alexander. After double-digit declines from peak to trough
in the second and third quarters of 2022, prices have held up
relatively well in major centres. The year-over-year value of
luxury homes in markets such as Calgary and Moncton increased, while the GTA, Hamilton-Burlington, Ottawa and Greater
Vancouver have fallen just short of peak Q1 levels.
In an effort to maintain supply and curtail demand from foreign
buyers, the government implemented its Prohibition on the Purchase
of Residential Property by Non-Canadians Act on January 1, 2023, which had unintentional
consequences on the construction of purpose-built residential
rentals and mixed-use projects across the country, as well as
sports and entertainment figures and corporate transfers throughout
the first quarter.
Amendments to the Act, effective March
27, 2023, included:
- Enabling more work permit holders to purchase a home to live in
while working in Canada.
- Repealing existing provisions so the prohibition doesn't apply
to vacant land; provide an exception for development purposes.
- Increasing the corporation foreign control threshold from three
per cent to 10 per cent.
The bulk of purchasers, however, remain local in most Canadian
markets, with the exception of some out-of-province activity in the
first quarter. Centres such as Kelowna on the west coast and in markets
throughout Canada's east coast
have seen an influx of buyers driven largely by lifestyle, as
strong value for the dollar proved enticing to move-up
purchasers.
After a tumultuous 2022, cautious optimism is growing in major
centres across the country. The ripple effect is starting to work
its way through the housing market, with all segments working in
tandem. Competitive offers, once again on the table from
St. John's to Greater Vancouver, are becoming increasingly
common, especially in areas such as the GTA where nearly 20 per
cent of freehold homes over $3
million sold at or above list price in Q1 2023.
Turn-key and renovated properties remain most sought
after,
as higher building costs have dampened the
appetite for new construction to some extent. While
softer, due to limited inventory in many markets,
the uber-luxe segment is starting to pick up in line
with overall activity in the upper end. Inventory, at
this level, however, is even more scarce.
"Home-buying activity is expected to ramp up in the months
ahead, with stronger demand and upward pressure on price
characterizing the second quarter of 2023," says Elton Ash, Executive Vice President, RE/MAX
Canada. "Recent stock market
volatility and bank failures south of the border that have sent
shockwaves throughout the financial markets may provide an
additional boost for Canadian housing markets as buyers turn to the
security of bricks and mortar yet again. While concerns exist over
the possibility of rising overnight rates and recessionary
pressures later in the year, the spring market appears to be
shifting into full swing."
MARKET-BY-MARKET OVERVIEW
GREATER VANCOUVER
- Buyers at the top end of the market are looking to take
advantage of somewhat softer housing values, but many sellers are
holding firm on price, even willing to pay vacancy taxes while
waiting for market conditions to improve.
- While move-up activity has been occurring as buyers take
advantage of discounts at the top end of the market, there has been
an uptick in sellers downsizing to smaller pieds-a-terre in the
core or selling secondary properties to avoid tax
implications.
- Based on the late first quarter burst of homebuying activity,
sales in the second quarter of 2023 are expected to ramp up in
tandem with the traditional spring market. Buyers who have been
sitting on the fence are likely to make their moves in the coming
months.
A critical shortage of available housing continues to impact
homebuying activity in the Greater
Vancouver Area, with demand exceeding supply at almost every
price point. New listings in February
2023 were down almost 40 per cent year-over-year, with even
tighter inventory of luxury homes for sale. Showings at higher
price points have increased in recent weeks as momentum at lower
price points spills over into luxury. Buyers at the top end of the
market are looking to take advantage of somewhat softer housing
values, but many sellers are holding firm on price, and even
willing to pay vacancy taxes while waiting for market conditions to
improve. While detached sales over $4
million in Greater
Vancouver have declined by almost 50 per cent, compared to
levels reported in the first quarter of 2022, the number of homes
that have changed hands in the first three months of 2023 are more
than 20 per cent ahead of Q4 2022. Just 16 sales have taken place
over $3 million in the attached
segment between January and March of this year– this, despite the
sale of a $19 million condominium
earlier in the quarter. Sixty-eight attached properties sold in the
first quarter of 2022.
While move-up activity has been occurring as buyers take
advantage of discounts at the top end of the market, there has been
an uptick in sellers downsizing to smaller pieds-a-terre in the
core or selling secondary properties to avoid tax implications.
Demand is greatest for luxury properties on Vancouver's Westside, from Oak St. west to the
university, with neighbourhoods such as Shaughnessy, Point Grey, Kerrisdale and Marine
Dr. most sought after. The vast majority of buyers are seeking
properties offering a view, gated or well-treed homes offering
privacy, as well as the usual bells and whistles including gyms,
wine cellars, theatre rooms, pools, and outdoor weather-proofed
kitchens. In terms of condominiums in the downtown core, there is
growing demand for larger, three-bedroom units although these are
exceptionally expensive, and few and far between. Party rooms,
rooftop terraces and spacious fitness areas are among the desired
amenities. Based on the late first quarter burst of homebuying
activity, sales in the second quarter of 2023 are expected to ramp
up in tandem with the traditional spring market. Buyers who have
been sitting on the fence are likely to make their move in the
coming months. An influx of listings, especially at luxury price
points, should help keep values stable, but if current conditions
persist, the Vancouver housing
market is likely to see some upward pressure on pricing.
FRASER VALLEY
- Lower-end price points are already experiencing multiple offers
in the double-digits, with homes selling well in excess of listing
prices in recent weeks.
- Buyers have adjusted their expectations as sellers hold firm on
asking price, while the sales-to-listings ratio signals a strong
seller's market.
- Supply remains a crucial component in the housing equation;
without an uptick in new listings, values will likely continue to
climb.
With inventory levels at a 30-year low and pent-up demand
building, the market for residential real estate in the Fraser
Valley is tightening. Lower-end price points are already
experiencing multiple offers in the double-digits, with homes
selling well in excess of listing prices in recent weeks. Open
houses held on properties priced from $700,000 to $2
million have been swamped with serious buyers. While
detached sales at the top end of the market are down from robust
levels reported in the first three months of 2022, the 30
properties priced over $3 million in
the first quarter of 2023 were 20 per cent ahead of fourth quarter
2022 levels. Nine strata condominiums have sold over the
$1.5 million price point in Q1 2023,
up from two in the fourth quarter of 2022. Buyers have adjusted
expectations as seller's hold firm in asking price while the
sales-to-listings ratio signal a strong seller's market. Trade-up
activity, however, is limited due to lack of inventory, which has
hampered sales in the top end. April to June will be the test, as
they are typically the strongest months on record for an influx of
new inventory. The entry point to luxury, between $3 million to $4
million, represents the lion's share of activity in the
Fraser Valley. South Surrey and
its ocean-view properties remain most coveted by affluent
purchasers. Any downward movement in terms of interest rates is
expected to spark a new flurry of homebuying activity across all
price points. Supply remains a crucial component in the housing
equation; without an uptick in new listings, values will continue
to climb. While 2023 was expected to be a challenging year for
residential real estate, all indicators now point to a solid year
of healthy homebuying activity, with consumer confidence climbing
and increased demand evident throughout all segments of the Fraser
Valley housing market.
KELOWNA
- REALTORS® are reporting renewed interest at the top end of the
market in recent weeks, which should translate into more sales in
the second and third quarters of 2023.
- Fifty-four homes traded hands over the first three months of
the year as concerns over stock performance amidst a flurry of bank
failures have shaken the market.
- As Canada's fastest-growing
metropolitan area, according to Statistics Canada, the increase in
out-of-town and out-of-province buyers should serve to further
bolster homebuying activity in the months ahead as temperatures and
sales heat up.
The traditional spring market has contributed to an upswing in
homebuying activity in Kelowna,
but the upward momentum has just begun to spark the city's luxury
market. Upper-end REALTORS® are reporting renewed interest at
the top end of the market in recent weeks, which should translate
into more sales in the second and third quarters of the year. Sales
of single-family homes and strata condominiums priced at
$1.5 million plus are down more than
50 per cent from Q1 2022, and about 17 per cent short of fourth
quarter of 2022 levels. Fifty-four homes traded hands over the
first three months of the year as concerns over stock performance
amidst a flurry of bank failures have shaken the market. Luxury
properties situated on Kelowna's
Lake Okanagan, priced from $2 million
to $5 million, continue to be most
sought after, with inventory levels, particularly tight this year.
Lakeview homes, homes with acreage, and properties with a pool
round out the most desirable features for today's discriminating
buyers. Pockets of luxury can be found throughout Kelowna and include enclaves in Upper Mission,
southeast Kelowna, Kettle Valley,
Wilden, Lakeview Heights, and
Black Mountain. Values in the top end have held up relatively well,
especially at uber-luxe price points. Sales are lagging at the
luxury segment's entry-level price point to luxury with nearly half
of the close to 350 homes currently listed for sale falling into
the $1.5 million to $2.2 million price bracket. The luxury segment
represents about 15 percent of total single-family sales this year,
down from approximately 21 percent in 2023. An influx of new luxury
condominiums has hampered sales of resale strata product over the
past year. As Canada's fastest
growing metropolitan area according to the 2021 Statistics Canada
Census, the increase in out-of-town and out-of-province buyers
should serve to further bolster homebuying activity in the months
ahead as temperatures and sales heat up. Kelowna's luxury segment is expected to remain
healthy, with balanced market conditions prevailing for the
remainder of the year.
CALGARY (City of)
- Market conditions remain challenging, despite a welcome
reprieve from last year's frenzied pace.
- Buyers are exercising caution in the market, and although
multiple offers continue to occur, the winning bid is rarely more
than $20,000 to $30,000 over asking.
- Values at the top end of the market are ahead of Q1 2022 as a
result, with average price up more than $30,000 in the first quarter of 2023
($1,426,848 vs. $1,405,954).
Although sales of luxury properties over $1 million are heating up throughout the city,
low inventory levels continue to hamper homebuying activity. Close
to 270 single-detached homes and apartments sold at $1 million plus in the first quarter, an increase
of 33.8 per cent over the Q4 2022 performance but well short of
record Q1 2022 levels. Market conditions remain challenging,
despite a welcome reprieve from last year's frenzied pace. Sellers
remain hesitant to list their properties for sale, fearing that
they will be unable to find a replacement home. Buyers are
exercising caution in the market, and although multiple offers
continue to occur, the winning bid is rarely more than $20,000 to $30,000
over asking, unlike some of the frothier bids seen just one year
ago. Inventory has dwindled over recent months and few new listings
have materialized with the advent of the spring market. Pent-up
demand is building as a result. Values at the top end of the market
are ahead of Q1 2022 as a result, with the average price up more
than $30,000 in the first quarter of
2023 ($1,426,848 vs. $1,405,954). Although single-detached homes make
up the majority of sales at the top end, executive condominiums are
starting to see greater activity. The renewed vibrancy of the city
centre, sparked by the growing number of employees returning to
their jobs in the core, has also served to attract more purchasers
to downtown condominium properties. Move-up buyers are behind the
push for luxury homes and condominium apartments, buoyed by strong
equity gains in recent years. Sales over $1
million represent approximately five per cent of the overall
market, with most sales occurring between $1.3 million and $1.8
million. Luxury tastes are exceptionally personal, with some
buyers attracted to acreage and square footage while others are
drawn to inner-city locations in closer proximity to the city core.
Some homeowners are downsizing or making lateral moves. While it's
unlikely that luxury sales will surpass last year's record pace in
the city, supply and demand are expected to remain in sync for the
remainder of 2023, which should ensure another solid year of
homebuying activity and continued price appreciation at the top end
of the market.
EDMONTON
- Despite building pent-up demand and an ongoing influx of buyers
from Ontario and British Columbia, listings available for sale
have slowed to a trickle, especially at the coveted $1 million to $1.2-million price point.
- Existing stock, including spec properties, is most
sought-after, with fewer buyers choosing to build or buy newer
homes from plans due to the uncertainty of spiralling construction
costs.
- As the spring market takes shape, luxury REALTORS® are fielding
more calls from both interested buyers and much-needed sellers but
some sort of catalyst is necessary to really kick-start the housing
market.
Tight inventory levels continue to challenge luxury buyers in
the first three months of 2023, with high-end sales over
$1 million hovering at 40, down
significantly from year-ago levels during the same period. Despite
building pent-up demand and an ongoing influx of buyers from
Ontario and British Columbia, listings available for sale
have slowed to a trickle, especially at the coveted $1 million to $1.2-million price point. Buyers are squeezed
between what they want and what is currently available, and they
seldom match up. Close to 260 listings are currently available
between $1 million and $14 million. Values, however, are holding up
fairly well, with no big dip, given that the cost to build is so
much higher. Move-up buyers, usually in their late 30's to late 40s
with teenage children, represent the lion's share of high-end
purchasers. Most are seeking large homes and substantial lot sizes
in mature neighbourhoods, a trend that ticked up during the
pandemic. Existing stock, including spec properties, is most
sought-after, with fewer buyers choosing to build or buy newer
homes from plans due to the uncertainty of spiralling construction
costs. The strongest demand is found in west end neighbourhoods
such as Crestwood and Laurier
overlooking the river valley, while Windsor Park and Belgravia are
popular destinations sough of the river by the University of Alberta. Upper-end buyers seeking
larger lots typically look to Edmonton's suburban communities such as
Windemere with its estate properties on the ravine or in
Summerside, where homes backing
onto the lake are coveted. Downsizing and lateral moves are also
occurring, albeit to a lesser extent, with homeowners in older,
established neighbourhoods trading large, tired homes for smaller
and newer infill properties within similar areas. The foreign buyer
ban has had an unintended consequence in the Edmonton area as corporate transfers and
professional sports players get caught up in the net. With no
exemptions in sight, many have chosen to rent. As the spring market
takes shape, luxury REALTORS® are fielding more calls
from both interested buyers and much-needed sellers but some sort
of catalyst is necessary to really kick-start the housing market. A
decline in interest rates would be the ideal impetus, providing a
boost to consumer confidence and mindset. Until then, we expect
activity to be somewhat tempered in the months ahead, with the
luxury market kicking into high gear by the fall.
SASKATOON
- Sales of luxury properties over $750,000 are on the upswing in Saskatoon, with homebuying activity in the
first quarter of the year expected to exceed levels reported during
the same period in 2022.
- The supply of homes available for sale continues to tighten
across the board.
- Strong economic fundamentals continue to underpin Saskatchewan's economy, providing an ideal
backdrop for a robust housing market.
Sales of luxury properties over $750,000 are on the upswing in Saskatoon, with homebuying activity in the
first quarter of the year expected to exceed levels reported during
the same period in 2022. To date, 27 sales have occurred over the
$750,000 threshold, up from 22 sales
during the first three months of 2022. The supply of homes
available for sale continues to tighten across the board. Concerns
over further rate hikes have driven strong move-up activity at
lower price points, with multiple offers now occurring in the
$400,000 to $700,000 range. Momentum is expected to spill
over into the luxury market, where pent-up demand is building. The
most active segment is priced between $850,000 and $1
million. Communities such as Westbridge and the Willows in South Saskatoon and Rosewood on the city's
east side are experiencing competitive offers on million-dollar
homes. Lakefront and acreage properties on the city's periphery are
also coveted, but most sought after are properties located on the
banks of the South Saskatchewan River. Saskatchewan Ave. and White
Swan River Rd. make up the uber-luxe segment of the market, with
price tags in excess of $1.5 million.
Days on market for upscale product in Saskatoon has declined in recent months, now
hovering at 49 days compared to 53 in the fourth quarter of last
year, reflecting the uptick in demand. Strong economic fundamentals
continue to underpin Saskatchewan's economy, providing an ideal
backdrop for a robust housing market. Healthy homebuying activity
is expected to continue at luxury price points for the remainder of
the year. Values at the top end, however, will depend on inventory.
Should the supply shortage continue, there could be upward pressure
on pricing.
WINNIPEG
- The pause on rate hikes has provided some slight stimulus in
the market, prompting those who were on the fence or waiting for
the market to bottom out to re-enter.
- Sales at the top end of the market appear to be better
insulated from market pressures, with uber-luxe sales over the
$1.5 million price point relatively
unaffected.
- While the move-up market has been subdued because of carrying
costs, there has been a flurry of downsizing activity in the top
end of the market as property owners look to simplify their
lifestyles.
The pace of luxury sales has picked up in recent weeks as the
number of showings and pending sales over the $700,000 price point increase. While sales in the
upper end are almost 55 per cent short of the peak in Q1 2022, the
51 homes that changed hands in the first quarter of 2023 are more
in line with the fourth quarter of 2022 levels. The pause on rate
hikes has provided some slight stimulus in the market, prompting
those who were on the fence or waiting for the market to bottom out
to re-enter. Showings/offers are increasing but more time is needed
to realize quantifiable effects. Sales at the top end of the market
appear to be better insulated from market pressures, with uber-luxe
sales over the $1.5 million price
point relatively unaffected. A good selection of inventory exists
over the $700,000 price point, but
supply over the $1.5 million
threshold is limited. There has been some pullback by sellers in
recent months who were unable to realize their ask price. While the
move-up market has been subdued because of carrying costs, there
has been a flurry of downsizing activity in the top end of the
market as property owners look to simplify their lifestyles. Sales
over $700,000 currently represent 4.1
per cent of total residential sales, with the majority occurring in
Tuxedo, Waverly West, Linden Woods,
East St. Paul/Pritchard Farms,
River Heights, Sage Creek,
Oak Bluff, Taylor Farms and
West St. Paul. Approximately 60
per cent of luxury sales occur in the city and 40 per cent occur
outside of Winnipeg. While features most attractive to
high-end buyers in Winnipeg
typically include greater square footage, larger lot sizes, pools,
theatre rooms, and home gyms, there has been a recent increase in
demand for joint family and in-law suites trending, with
requirements for more square footage and finer finishes.
LONDON
- Balanced market conditions exist at present, but rising sales
are depleting the limited supply of homes available for sale in
London.
- New construction has faltered over the $1 million price point as the gap between resale
and homebuilders' pricing increases.
- Luxury sales are expected to gain traction with the advent of
the traditional spring market, but high-end buyers will likely
remain somewhat cautious with the threat of further interest rate
hikes ever present.
Rising confidence levels, prompted by the Bank of Canada's decision to temporarily pause rate
hikes, have translated into greater homebuying activity in the
London-St. Thomas market in recent weeks. The uptick,
most pronounced for homes in the $400,000 to $600,000 price range, has filtered into every
segment of the residential market, including luxury. Demand for
properties priced over $1.2 million
in the first quarter of the year are comparable to Q4 2022 levels
at 40 but are down from the 259 sales reported in the first quarter
of 2022. Balanced market conditions exist at present, but rising
sales are depleting the limited supply of homes available for sale
in London. Average prices at the
top end have experienced some softening but remain propped up by
low inventory levels. The southwest, northwest, and areas due north
of the city are most popular with luxury buyers. Neighbourhoods
such as Masonville and High Park
have experienced big build up in recent years, sought-after by
professionals who work in the hospitals, universities and colleges
located in the North End of the city. The southwest has also
experienced solid demand from high-end buyers seeking newer homes
in close proximity to retail centres. New construction has faltered
over the $1 million price point as
the gap between resale and builders pricing increases. Several
assignments have come to market in recent months as buyers look to
recoup some of their losses. Luxury sales are expected to gain
traction with the advent of the traditional spring market, but
high-end buyers will remain somewhat cautious with the threat of
further interest rate hikes ever present.
HAMILTON-BURLINGTON
- February sales showed increased strength at higher price
points, with affluent buyers typically seeking newer, high-end
product or older homes that have been completely gutted.
- Inventory levels are up over last year in the luxury segment
but remain in balanced market territory.
- The uber-luxe segment of the market, priced between
$4 million and $5 million, has performed relatively well as it
is somewhat insulated from the overall market stressors.
While sales activity at the $2
million price point was down considerably from last year's
record levels in Hamilton-Burlington, demand for luxury properties
during the first quarter of 2023 show improvement over the previous
quarter. Forty-three sales were recorded in the first three months
of 2023, down from 171 during the same period one year ago but are
well ahead of Q4 sales. The luxury segment now represents less than
one per cent of overall sales in the Hamilton-Burlington market. Homebuying activity in the
top end bottomed out in early in the year, with February
sales showing increased strength at higher price points, with
affluent buyers typically seeking newer, high-end product or older
homes that have been completely gutted. Demand is greatest in
southeast Burlington as luxury
buyers move closer to the coveted Oakville area and proximity to the
Toronto core. Popular high-end
areas also include Ancaster,
Dundas, and southwest Hamilton including Kirkendall. Inventory
levels are up over last year in the luxury segment but remain in
balanced market territory. The Bank of Canada decision to pause interest rate hikes
has provided some stability to the marketplace, with both buyers
and sellers returning to the market. To that point, there has been
a notable uptick in showings of properties over $2 million in Hamilton in recent weeks. The uber-luxe
segment of the market, priced between $4
million and $5 million has
performed relatively well as it is somewhat insulated from the
overall market stressors. Prices have held relatively stable at the
top end, down approximately four per cent from year ago
levels.
GREATER TORONTO AREA
- Hungry buyers returned to the market, expecting bargains and
selection, but finding neither.
- Limited inventory has placed upward pressure on values and
prompted a new round of competitive offers on well-priced homes in
desirable areas.
- Buyers are feeling frustrated with the lack of selection
available, particularly in the $3
million to $5 million prince
range. Midtown communities such as Summerhill, Forest Hill, Annex, South Hill/Casa Loma,
Bedford Park, and Lytton Park are
most popular with this segment of the market.
Pent-up demand for housing in the Greater Toronto Area (GTA) was released with
the Bank of Canada's decision to
temporarily pause interest rates increases early in the first
quarter of 2023. The move provided the impetus for homebuying
activity to roar back to life throughout the city and in outlying
areas. Hungry buyers returned to the market, expecting bargains and
selection, but finding neither. Limited inventory has placed upward
pressure on values and prompted a new round of competitive offers
on well-priced homes in desirable areas. Momentum has since
trickled into the luxury market over the $3
million price point, especially at the entry level. Year to
date, more than 260 homes have sold at $3
million plus, down substantially from the peak level of 702
sales reported in the first quarter of 2022 but ahead of Q4 2022
levels. The average price for high-end freehold and condominium
properties has remained relatively stable, falling about 2.7 per
cent in Q1 2023 from frothy first quarter 2022 levels ($4,056,809 vs. $4,165,593). Of the close to 250 freehold sales
reported over $3 million, 48 sold at
or above list price, representing almost 20 per cent. Activity
started to shift into high gear in late March, with more showings
and sales reported, including two sales over $8 million. Buyers are feeling frustrated with
the lack of selection available, particularly in the $3 million to $5
million range. Midtown communities such as Summerhill,
Forest Hill, Annex, South
Hill/Casa Loma, Bedford Park and
Lytton Park are the most popular with this segment of the
market. While entry and mid-level price points are heating up,
the uber-luxe market remains soft, with just two sales occurring
over the $10 million benchmark so far
this year. Inventory levels are in large part responsible, with
only two properties listed for sale in the sought-after
Forest Hill and Rosedale neighbourhoods and 22 listed over
$10 million throughout the remainder
of the 416-area code. The foreign buyer ban has had a minor impact
on the GTA thus far, given domestic buyers have dominated most of
the movement in the market in recent years. Greater stability in
the overall market has been noted with the Bank of Canada holding on interest rate hikes, with
consumer confidence improving from last year's levels. As of
late in the quarter, as a result of the SVB bank failure there
seems to be a new wave of buyers wanting to make bigger purchases
to get more of their cash into real estate. If the current
trending continues in the high-end, the
market will likely experience upward pressure on values
once again.
OTTAWA
- Homebuying activity at the entry-level to luxury – between
$1.25 million and $1.5 million – is particularly brisk, with more
than half of all luxury sales occurring at that price point.
- Momentum is strong heading into the spring market, a direct
contrast to Q4 2022, when uncertainties plagued the housing
market.
- The stage is set for an active first quarter, with demand for
luxury homes expected to gain traction in the coming months.
Rising consumer confidence levels contributed to a notable
uptick in demand for housing in Ottawa's residential real estate market in the
latter half of the first quarter. More than 90 luxury freehold and
condominium properties changed hands over $1.25 million in the first three months of the
year, surpassing Q4 levels for 2022 by seven per cent. Values are
firming up at the top end of the market, given the limited supply
of homes listed or sale. Homebuying activity at the entry-level to
luxury – between $1.25 million and
$1.5 million – is particularly brisk,
with more than half of all luxury sales occurring at that price
point. The average price of sales over $1.25
million was $1,593,310 in the
first quarter of the year, off just five per cent from year-ago
levels. Momentum heading into the spring market is strong, a direct
contrast to the fourth quarter of the year when uncertainties
plagued the housing market. Both buyers and sellers breathed a
collective sigh of relief with the temporary pause in interest rate
hikes in January and buyers ventured back into the market in
February and March as mortgage rates fell. Luxury buyers in the
nation's capital have typically been drawn to turn-key homes in
established neighbourhoods, including Rockcliffe, Manor Park, Glebe, Old Ottawa,
Golden Triangle, Westboro, Greeley and Manotick. Uber-luxe over the $3 million price point is on the road to
recovery, with three sales posted year-to-date, down from five
during the same period in 2022. The stage is set for an active
second quarter, with demand for luxury homes expected to gain
traction in the coming months. An influx of new listings is
anticipated as the weather improves, with supply meeting
demand.
ISLAND OF MONTREAL
- An ample supply of high-end, single-detached homes and
condominiums is currently listed for sale across the city.
- Uber-luxe buyers have been active in the market recently,
driving sales at $5 million plus,
including a recent sale in Westmount for almost $8
million and Ville-Marie
(Westmount adjacent) for
$5.6 million.
- As homebuying momentum gains traction in the Island of
Montreal heading into the busiest
months of the year for the residential market, spillover is
expected in the luxury segment.
Demand for luxury property in Montreal has edged up with the advent of the
traditional spring market. Buoyed by the positive news delivered by
the Bank of Canada in January and
reinforced in March, buyers have finally returned to the market,
taking advantage of greater selection and softer housing values in
the upper end. While the number of homes that have changed hands at
luxury price points in excess of $1.5
million remain well off last year's levels with 73 sales
year-to-date, compared to 128 during the same period last year,
momentum is heading in the right direction. There were 72 sales
over $1.5 million in the fourth
quarter of 2022. An ample supply of high-end, single-detached homes
and condominiums is currently listed for sale across the city.
Renovated and unique properties are sparking the greatest interest,
especially in the luxurious pockets of Westmount, Outremont, and the Town of Mont-Royal. Most buyers at luxury
price points are reluctant to purchase homes that require
substantial updating, preferring instead to buy turn-key
properties. Uber-luxe buyers have been active in the market
recently, driving sales at $5 million
plus, including a recent sale in Westmount for almost $8
million and Ville-Marie
(Westmount adjacent) for
$5.6 million. Most buyers are moving
up, although some downsizing is also occurring, albeit at a slower
pace, with sellers cashing in on equity gains realized over the
past decade or so. Single-detached homes remain most sought-after
while a glut of condominium product exists at higher price points.
As homebuying momentum gains traction in the Island of Montreal heading into the busiest months of
the year for the residential market, spillover is expected in the
luxury segment. High-end homes that are well priced and well
located will generate the greatest buzz, while tired properties
will need to be updated or priced accordingly to sell. Pent-up
demand has been building and if interest rates decline, there could
be a flurry of activity as buyers, many of whom have been waiting
on the fence for at least six to nine months, reinvigorate the
housing market.
MONCTON
- The city's luxury space has experienced solid growth since the
onset of the pandemic.
- A shortage of listings exists across every price point but are
particularly scarce at the $700,000
threshold.
- As demand for properties in Moncton and the surrounding areas soared and
pricing matured, instances of sales over the million-dollar
benchmark increased.
Homebuying activity in Moncton's upper-end has been relatively solid
year-over-year, with the number of sales over the $700,000 price point falling just one short of
2022 first quarter levels. Thirteen properties (including eight
closed and five pending) were sold in Q1 2023, down from the 14
sales during the same period in 2022. First quarter sales were up
on par with fourth quarter sales. The city's luxury space has
experienced solid growth since the onset of the pandemic. Prior to
2020, few sales occurred over the $700,000 price point. As demand for properties in
Moncton and the surrounding areas
soared and pricing matured, instances of sales over the
million-dollar benchmark increased. Average price at the top end of
the market hovered at $826,750 in the
first quarter (based on the eight sales – no price available for
pending), compared to $811,121 in the
first quarter of 2022. While the vast majority of sales in the city
are occurring at lower price points, the upper tier is attracting
both professionals and out of area buyers who are fascinated by the
reasonable cost of housing. Shediac is of particular interest with out of
province and foreign buyers seeking the coastal lifestyle at a
fraction of the cost of housing on the west coast. The most popular
areas with affluent local buyers include properties situated on the
golf course in Dieppe and more
rural areas like Irishtown. A
shortage of listings exists across every price point but are
particularly scarce at the $700,000
threshold. Many sellers are sitting on their luxury properties,
given that there is little product from which to choose, and a
reluctance to commit to higher mortgage rates. While the promise of
a temporary pause in interest rate hikes has provided some
stability in Moncton's residential
housing market, the real push for high-end real estate will
materialize later this year once interest rates decline. The luxury
segment represents approximately eight per cent of overall sales in
Moncton and the surrounding
area.
HALIFAX
- Pent-up demand is building, yet there are numerous buyers on
the fence, despite the pause in interest rate increases.
- Inventory remains sparse at the top end of the market, with
limited product available in high-demand areas such as the
Peninsula of Halifax, along with
Bedford and the Fall River areas.
- Luxury sales in the first quarter of 2023 were slightly ahead
of fourth quarter 2022 levels, but it's too soon to tell if the
spring market will blossom
While luxury sales have remained relatively steadfast in the
first quarter of 2023, there has been a nominal uptick in overall
activity in Halifax in recent
weeks with the arrival of the spring market. Forty-two homes
including freehold and condominiums have sold over the $1 million price point to date, down almost 50
per cent from year-ago levels during the same period. Values,
however, have remained consistent year over year, averaging
$1.3 million. The luxury segment
represents about five per cent of the overall market. Pent-up
demand is building, yet there are numerous buyers on the fence,
despite the pause in interest rate increases. Uncertainty has
played a role in the market, particularly in recent weeks given the
banking crisis in the US and its global reverberations. Inventory
remains sparse at the top end of the market, with limited product
available in high-demand areas such as the Peninsula of
Halifax, along with Bedford and
the Fall River areas. Approximately 120 active listings are
currently available for sale, down from year-ago levels but up
proportionately to the overall active listings. Trade-up activity
at the top end is still occurring but has slowed somewhat as fewer
people are benefitting from the big equity gains that the last two
years provided. Square footage and large lots are the foremost
features driving the move-up market, while waterfront,
harbourfront, and lakefront homes are commanding a premium. Luxury
sales in the first quarter of 2023 were slightly ahead of fourth
quarter 2022 levels, but it's too soon to tell if the spring market
will blossom. Homebuying activity in the year ahead is likely to be
slower than in previous years for the luxury segment, given fewer
migratory buyers from other provinces and the implementation of the
foreign buyers ban.
ST. JOHN'S
- Sellers are hesitant to list their properties due to the dearth
of available listings, and builders are reluctant to put a shovel
in the ground without a firm commitment given today's
higher-interest-rate environment.
- Representing about five per cent of total sales, the luxury
segment has taken off in recent years thanks to the province's
strong economic base which remains propped up by the province's
natural resources.
- The Bank of Canada
announcement regarding the temporary pause in interest rates has
been welcome news to buyers in the St.
John's area. While it has yet to translate into greater
sales at the top end of the market, it has provided some stability
for the impending spring market.
While demand for luxury properties continues to build in
St. John's, existing inventory
continues to fall short of buyer expectations. After a brisk fourth
quarter of 2022, when close to 60 high-end properties priced in
excess of $600,000 changed hands,
just 18 properties sold in the first quarter of 2023 (almost on par
with year-ago levels for the same period). Sellers are hesitant to
list their properties due to the dearth of available listings, and
builders are reluctant to put a shovel in the ground without a firm
commitment given today's higher-interest-rate environment.
Throughout the first three months of the year, buyers braved
inclement weather to visit the few new high-end listings that came
to market. One property, priced over $800,000, experienced 15 showings and three
offers, selling on its first day on market. Representing about five
per cent of total sales, the luxury segment has taken off in recent
years thanks to Newfoundland/Labrador's strong economic base which remains
propped up by the province's natural resources. There has been a
slight uptick in recent weeks as the spring market takes hold.
Move-up buyers are most active in the upper-end, with most seeking
large homes, featuring 9 ft. ceilings, spacious kitchens, and
generous lot sizes. While many will gravitate to newer construction
in the high-end, the cookie-cutter homes of yesterday will not
suffice. Luxury buyers interested in building custom homes are
spending $500,000 for lots in
established enclaves such as Churchill Square. Those seeking mature
areas at a lower sticker price are attracted to Clovelly
Trails in the east end where buyers can pick up a lot for
$150,000 to $160,000 and build their dream home.
Neighbourhoods such as Logy Bay
are a popular choice with those seeking existing luxury homes. In
the coveted Portugal Cove / St. Philips and Paradise
communities, luxury properties
in Country Gardens are highly sought-after, but listings
are few and far between. While the foreign buyer ban has restricted
purchases within St. John's, the
neighbouring coastal areas have experienced some activity as they
are not subject to the ban. The Bank of Canada announcement regarding the temporary
pause in interest rates has been welcome news to buyers in
the St. John's area. While it has yet to translate into
greater sales at the top end of the market, it has provided some
stability for the impending spring market.
About the RE/MAX Network
As one of the leading global real estate franchisors, RE/MAX, LLC
is a subsidiary of RE/MAX Holdings (NYSE: RMAX) with more than
140,000 agents in almost 9,000 offices with a presence in more than
110 countries and territories. RE/MAX Canada refers to RE/MAX of Western Canada (1998), LLC, RE/MAX
Ontario-Atlantic Canada, Inc., and RE/MAX Promotions,
Inc., each of which are affiliates of RE/MAX, LLC. Nobody in the
world sells more real estate than RE/MAX, as measured by
residential transaction sides.
RE/MAX was founded in 1973 by Dave and
Gail Liniger, with an innovative, entrepreneurial culture
affording its agents and franchisees the flexibility to operate
their businesses with great independence. RE/MAX agents have lived,
worked and served in their local communities for decades, raising
millions of dollars every year for Children's Miracle Network
Hospitals® and other charities. To learn more about RE/MAX, to
search home listings or find an agent in your community, please
visit remax.ca. For the latest news from RE/MAX Canada, please visit blog.remax.ca.
Forward looking statements
This report includes
"forward-looking statements" within the meaning of the "safe
harbour" provisions of the United States Private Securities
Litigation Reform Act of 1995. Forward-looking statements may be
identified by the use of words such as "believe," "intend,"
"expect," "estimate," "plan," "outlook," "project," and other
similar words and expressions that predict or indicate future
events or trends that are not statements of historical matters.
These forward-looking statements include statements regarding
housing market conditions and the Company's results of operations,
performance and growth. Forward-looking statements should not be
read as guarantees of future performance or results.
Forward-looking statements are based on information available at
the time those statements are made and/or management's good faith
belief as of that time with respect to future events and are
subject to risks and uncertainties that could cause actual
performance or results to differ materially from those expressed in
or suggested by the forward-looking statements. These risks and
uncertainties include (1) the global COVID-19 pandemic, which has
impacted the Company and continues to pose significant and
widespread risks to the Company's business, the Company's ability
to successfully close the anticipated reacquisition and to
integrate the reacquired regions into its business, (3) changes in
the real estate market or interest rates and availability of
financing, (4) changes in business and economic activity in
general, (5) the Company's ability to attract and retain quality
franchisees, (6) the Company's franchisees' ability to recruit and
retain real estate agents and mortgage loan originators, (7)
changes in laws and regulations, (8) the Company's ability to
enhance, market, and protect the RE/MAX and Motto Mortgage brands,
(9) the Company's ability to implement its technology initiatives,
and (10) fluctuations in foreign currency exchange rates, and those
risks and uncertainties described in the sections entitled "Risk
Factors" and "Management's Discussion and Analysis of Financial
Condition and Results of Operations" in the most recent Annual
Report on Form 10-K and Quarterly Reports on Form 10-Q filed with
the Securities and Exchange Commission ("SEC") and similar
disclosures in subsequent periodic and current reports filed with
the SEC, which are available on the investor relations page of the
Company's website at www.remax.com and on the SEC website at
www.sec.gov. Readers are cautioned not to place undue reliance on
forward-looking statements, which speak only as of the date on
which they are made. Except as required by law, the Company does
not intend, and undertakes no duty, to update this information to
reflect future events or circumstances.
SOURCE RE/MAX Canada