TORONTO--(BUSINESS WIRE)--Renewed confidence in Canada's post-pandemic return and economic recovery bolstered gains across the country's major metropolitan luxury real estate markets through the first half of 2021. As the Bank of Canada reported first-quarter GDP growth at a “robust” 5.6%, the Conference Board of Canada projected a 6.1% expansion of real GDP in 2021, with solid economic recovery expected across every province. Resulting confidence, housing demand and eroding luxury real estate inventory were captured in new data compiled by Sotheby’s International Realty Canada that reflect record-breaking levels of activity and prices across the country’s major luxury markets through the first half of the year.
Activity in the Greater Toronto Area (Durham, Halton, Peel, Toronto and York) luxury residential real estate market eclipsed the superlative performance of other Canadian markets in the first half of 2021, as sales over $4 million (condominiums, attached and single family homes) soared 276% year-over-year. Of these, 15 ultra-luxury properties sold over $10 million, an increase of 114%, from the first half of 2020. Significant gains were experienced across all luxury housing types, with sales over $4 million for condominiums, attached and single family homes up 88%, 400% and 290% year-over-year, respectively. Overall, $1 million-plus residential sales surged 217% year-over-year in a market that heavily favoured sellers and fatigued buyers.
The tempo of Vancouver’s luxury market also accelerated to a frenetic pace in the first half of 2021, as residential sales over $4 million and $10 million surged 152% and 300% year-over-year, respectively. As in the case of Toronto and Montreal, the performance of the city’s luxury condominium market overcame its initial pandemic stall, with $4 million-plus sales regaining momentum over the spring to achieve a 138% year-over-year gain by the first half of 2021. Meanwhile, $4 million-plus single family home and attached home sales climbed 152% and 300%, respectively. By mid-year, residential real estate sales over $1 million were up 107% from 2020 levels.
Montreal’s $4 million-plus residential real estate sales rose 133% year-over-year in the first half of 2021, recapturing its pre-pandemic momentum that had seen the city’s luxury market achieve multi-year annual sales gains and solidify its position as a global luxury real estate destination. Single family home sales over $4 million increased 160% year-over-year, while the sale of a condominium listed at $12.9 million by Sotheby’s International Realty Quebec broke the province’s historic record for condominium prices on MLS. Overall, real estate sales over $1 million rose 112% from the first half of 2021, setting a new benchmark for activity and prices for the city’s luxury segment.
Luxury real estate activity in Calgary renewed in the first half of 2021 as business, real estate industry and consumer sentiment took on a cautiously optimistic tone with gains in oil and gas prices, and broader vaccine coverage. The $1 million-plus residential real estate market transitioned to more balanced market conditions as sales rose 236% year-over-year from the levels seen in the first half of 2020, albeit unevenly across housing types. While activity recovered across the city’s single family and attached home markets, with healthy 230% and 338% year-over-year sales gains respectively, condominium sales over $1 million continued to comprise a nominal percentage of the luxury market despite an uptick of 350% to nine units sold in the first half of 2021.
“The pandemic era reinforced the importance of ‘home’ and ‘space’ to a degree that has never been experienced; we expect this to have a lasting impact across many facets of the Canadian luxury real estate market,” says Don Kottick, President and CEO of Sotheby’s International Realty Canada. “Perhaps most profoundly, there has been a major shift in the psychology of luxury real estate consumers and homeowners. The new reality is that as the perceived value of living space has increased, affluent buyers’ ‘willingness to pay’ for luxury real estate has increased exponentially. Affluent consumers are more prepared to invest in additional space and in next-level architecture and design, whether through upsizing, home renovations or home building. This is elevating the quality and pricing of housing in Canada’s most prestigious neighbourhoods, in many cases, permanently.”
According to Kottick, the impact of pandemic luxury market influences previously reported in Sotheby’s International Realty Canada’s 2021 Spring Outlook will continue to cascade across the country’s real estate market in the coming months. Strengthening confidence in a Canadian economic recovery, the anticipated reopening of provincial and national borders to travel and immigration, as well as the continued access to low-cost borrowing and stores of cash savings will empower multiple waves of local and international luxury real estate consumers into the latter half of 2021, driving luxury sales.
Top-Tier Market Highlights: Mid-Year 2021
Vancouver
Historically low-interest rates, pandemic-driven changes in housing needs, and enduring local and global confidence in the City of Vancouver’s real estate market set every segment of the city’s luxury residential housing segment ablaze in the first half of 2021. Activity rapidly accelerated as luxury home buyers and sellers emerged with the province’s gradual reopening, first tearing across the single family and attached home markets, and then across the condominium market. While record-setting activity across the conventional market tempered by May 2021, sales remained above long-term averages according to the Real Estate Board of Greater Vancouver; further, any reprieves in the luxury market were fleeting. Scarce inventory in face of relentless demand from luxury home buyers drove bidding wars, elevated prices, and fatigued homebuyers in a period that saw unprecedented activity.
As a result, in the first half of 2021, luxury residential real estate sales over $4 million (condominiums, attached and single family homes) soared 152% year-over-year to 232 properties sold. Ultra-luxury residential sales over $10 million quadrupled to 16 properties sold compared to four sold during the first half of 2020, all within the single family home market. Luxury property sales between $2–4 million increased 114% year-over-year to 872 properties sold, while $1–2 million property sales saw year-over-year gains of 100% to 2,095 properties sold. Overall, residential real estate sales over $1 million were up 107% year-over-year to 3,199 properties sold in the first half of the year, with 40% of these homes selling above the listed price.
Following a temporary lull after the pandemic’s inception, Vancouver’s luxury single family home market was the first to reignite towards the end of 2020. Between January 1– June 30, 2021, luxury single family home sales over $4 million soared 152% from the same period in 2020 to 209 homes sold. 16 homes sold over $10 million compared to three sold during the first half of 2020, while $2–4 million single family home sales rose 112% to 705 homes sold. Conventional $1–2 million sales increased 69% to 750 units. By mid-year, 1,664 single family home sales had sold over $1 million, up 94% year-over-year, with 49% of homes selling above list price. The benchmark prices for a single family home in Vancouver West and Vancouver East increased 12.4% and 16.3% year-over-year to $3,458,300 and $1,696,500 respectively by June 2021.
Luxury attached home sales also rose in the first half of 2021, with four attached homes selling over $4 million where there had been only one such transaction in the first half of 2020 . Attached home sales between $2–4 million and $1–2 million were up 182% and 128% year-over-year, to 79 and 624 properties, respectively. Overall, $1 million-plus sales were up 133% year-over-year in the first half of 2021 to 707 homes sold; 41% of these sold above list price.
The City of Vancouver’s luxury condominium sales also resurged in the first half of the year, regaining the nominal ground lost in the initial stages of the pandemic. In the first half of 2021, luxury condominium sales over $4 million more than doubled with a 138% year-over-year increase to 19 units sold. $2–4 million luxury sales rose 87% to 88 units sold, while sales between $1–2 million increased 118% year-over-year to 721 units sold. Condominium sales over $1 million experienced a 115% year-over-year increase overall, to 828 units sold in the first half of 2021. 23% of the $1 million-plus luxury condominiums sold during this time did so above list price.
Calgary
The forecast for Alberta’s economy brightened in the first half of 2021 as oil prices rebounded following an early spring slump, and as natural gas prices revived despite the pandemic. By mid-year, the Conference Board of Canada forecast a gain of 7.2% in provincial GDP for 2021, the strongest projected rebound for the provinces. Renewed confidence in Alberta’s post-pandemic economic recovery revived sales activity across Calgary’s conventional and luxury real estate markets. Historically low interest rates that encouraged first-time homebuyers, upsizers and investors, as well as interprovincial migration into Calgary from Canadians seeking affordable housing, propelled Calgary to record-high June sales with 2,915 homes sold, an increase of 65.3% year-over-year according to the Calgary Real Estate Board (CREB).
Additionally, a shortage of inventory in premier neighbourhoods supported price gains across the conventional single family and attached home markets, with single family home prices increasing 13.1% from 2020, and semi-detached home prices increasing 11.2% year-over-year for June. Price gains have been experienced across almost all Calgary districts, with some of the most significant year-over-year increases occurring in the North, North West, and South East districts.
The city’s luxury real estate market experienced a corresponding lift. From January to June 2021, 615 residential properties (condominiums, attached and single family homes) sold over $1 million in the City of Calgary, an increase of 236% year-over-year, with 14% of these properties selling above list price. 550 properties sold between $1–2 million, up 235% year-over-year, and 64 units sold between $2–4 million, a 237% annual increase. Lack of inventory in the city’s most prestigious neighbourhoods, including Aspen Woods, Mount Royal, and across Calgary’s Inner-City, placed upward pressure on prices in the top-tier of the market.
Single family home sales comprised 93% of Calgary’s $1 million–plus real estate transactions in the first half of 2021, with 571 homes sold, an increase of 230% from the previous year and with 14% of these home sales surpassing their listed prices. Single family home sales in the $1–2 million price range were up 228% year-over-year, with 508 homes sold from January to June 2021. Sales in the $2–4 million price range also rose to 63 homes sold, an annual increase of 250%. Sotheby’s International Realty Canada experts have noted that Calgary’s luxury single family home market has seen an increase in sales resulting from inter-provincial migration into the city, from young professionals from major metropolitan areas seeking comparatively affordable single family housing, and from native Calgarians motivated to return home for lifestyle, family and cost-of-living reasons following the pandemic. This cohort of affluent, “work from anywhere” Canadian professionals are expected to contribute to the recovery of the city’s top-tier real estate as travel restrictions relax.
Luxury $1 million–plus attached home sales in Calgary increased 338% in the first six months of the year compared to the year previous, with 35 units sold, as overall semi-detached home sales saw the strongest five-month total on record in May 2021, according to the CREB. Out of these transactions, 34 of the properties sold between $1–2 million, while one attached home sold between $2–4 million.
Calgary’s previously quiet luxury condominium market saw marginal year-over-year sales gains with nine properties sold over $1 million in the first six months of 2021, up from two units sold in this price range one year prior. All but one transaction took place in the $1–2 million range, an indication of excess luxury supply and soft demand in a market segment that continues to skew heavily in favour of buyers and investors. One condominium sold over $4 million in the first half of 2021, where none had sold above this price in the first half of 2020.
While the recovery of Calgary’s economy and its top-tier real estate market is tinged with caution, the city’s resilience is indisputable given its recent rebound despite the challenges presented by both the COVID-19 pandemic, and the longstanding turbulence of the oil and gas market. With the province in Stage 3 of its reopening as of July 1, 2021, consumer and industry confidence has clearly resurged. All indicators foreshadow continued gains in the luxury market as the city emerges from the pandemic.
Greater Toronto Area (GTA)
Despite enduring a prolonged period of stay-at-home lockdowns and restrictions since April due to an aggressive third wave of COVID-19, the performance of Canada’s largest luxury real estate market eclipsed that of other major metropolitan areas in the first half of 2021.
Luxury residential real estate sales in the Greater Toronto Area (Durham, Halton, Peel, Toronto and York) rebounded in the first half of the year, shattering sales records and reinforcing the region’s position as the national leader in luxury real estate sales. As the pandemic drove significant changes in consumer housing needs, intense local demand readily absorbed supply. Low interest rates and broad confidence in the long-term fundamentals of Canada’s dominant economic region also contributed to a market characterized by rapid sales, bidding wars, and untethered price gains across every high-end residential housing type. Sotheby’s International Realty Canada experts noted that across the GTA, rising luxury real estate prices have been fuelled by affluent consumers’ increasing “willingness-to-pay” over the course of the pandemic. This sentiment has risen steeply with the general desire for more and higher quality living space, and with consumers’ rising expectations for an elevated calibre of design, finishes and amenities that are redefining luxury homes across the region.
Overall GTA luxury residential sales over $4 million (condominiums, attached and single family homes) rose 276% year-over-year to 414 properties sold in the first half of 2021. Of these, 15 ultra-luxury properties sold over $10 million compared to seven properties sold above this price in the first half of 2020. $2–4 million and $1–2 million sales experienced 236% and 213% gains to 3,900 and 25,080 properties sold respectively. Sales over $1 million were up 217% overall in the first half of the year at 29,394 transactions, with a significant 67% selling above list price.
In the City of Toronto, residential real estate sales over $4 million (condominiums, attached and single family homes) increased 188% from 2020 levels to 233 properties sold in the first half of 2021. Of these, nine ultra-luxury homes sold over $10 million, compared to six homes sold in the first half of 2020. Sales between $2–4 million increased 140% to 1,707 properties sold, while sales between $1–2 million rose 162% year-over-year to 7,061 properties sold. Overall, residential sales over $1 million in the City of Toronto experienced a 159% year-over-year increase to 9,001 properties sold in the first half of 2021 with 64% of these transactions surpassing the list price.
Buoyed by consumer demand for more space given changing work and lifestyle needs with the pandemic, the GTA luxury single family home market soared in the first half of 2021. Luxury sales over $4 million were up 290% in year-over-year gains in the GTA, and 199% in the City of Toronto, to 394 and 215 homes sold. 14 single family homes sold over $10 million in the GTA during this time compared to seven sold in the same period in 2021, while $10 million-plus single family home sales in the City of Toronto increased 33% to eight homes sold compared to six sold in the first half of 2020. In the GTA, $2–4 million and $1–2 million sales rose 247% and 202% to 3,538 and 19,220 homes sold respectively. Meanwhile, in the City of Toronto, sales between $2–4 million and $1–2 million increased 139% and 192% to 1,381 and 3,975 homes sold. By mid-year, GTA and City of Toronto single family home sales over $1 million were up 209% and 177%, to 23,152 and 5,571 homes sold. 67% of $1 million-plus GTA single family home sales and 66% of those in the City of Toronto took place above list price.
As single family home price escalation continued to sideline buyers into higher density housing options, luxury attached home sales and prices climbed sharply, even as a dearth of inventory constrained activity. Five attached homes sold over $4 million in the first half of 2021 in the GTA, all in the City of Toronto, compared to one home sold in the first half of 2020. Sales of luxury attached homes between $2–4 million increased 222% year-over-year in the GTA, and 209% in the City of Toronto to 232 and 216 homes sold. $1–2 million attached home sales increased 342% to 4,395 units sold in the GTA during this time, with City of Toronto-specific sales rising 150% to 1,895 units sold. Overall GTA and City of Toronto attached home sales over $1 million surged 334% and 155%, to 4,632 and 2,116 homes sold in the first half of the year. 77% of $1 million-plus GTA and City of Toronto attached homes sold above list price.
Although consumer demand for luxury single family homes overshadowed that for condominiums in the latter months of 2020, luxury condominium market activity, velocity and confidence accelerated through the first half of 2021. As demand for urban living reignited with broader vaccine availability, and as the lack of inventory in the single family and attached home markets channelled homebuyers into higher density housing, bidding wars and price gains once again became the market norm. However, the impact of the pandemic on luxury real estate consumer preferences has been evident in both the new construction and resale markets. Sotheby’s International Realty Canada experts have noted that local demand for low- and mid-rise boutique luxury condominium residences has flourished, coloured by consumer preferences for lower density condominium living and larger floor plates, even as Toronto’s luxury high-rise listings have attracted an increasing volume of global enquiries, with increased sales transactions anticipated as travel restrictions continue to lift.
Overall luxury condominium sales over $4 million were up 88% year-over-year in the GTA from eight sold in the first half of 2020, to 15 units sold in the first half of 2021. One unit sold over $10 million compared to zero units the year prior. Luxury condominium sales between $2–4 million were up 91% to 130 units sold, while GTA condominium sales between $1–2 million were up 126% year-over-year to 1,465 units sold. Overall GTA condo sales over $1 million were up 122% in the first half of 2021 to 1,610 units sold, with 39% of these selling above list price.
In the City of Toronto, luxury condominium sales over $4 million increased 63% from eight sold in the first half of 2020 to 13 units sold in the first half of this year, with one unit selling above $10 million compared to zero in the first half of 2020. Sales between $2–4 million climbed 80% year-over-year to 110 units sold from January to June, while sales between $1–2 million surged a significant 109% year-over-year in the first half of 2021 to 1,191 units sold. Overall condo sales over $1 million in the City of Toronto were up 105% to 1,314 units sold in the first half of 2021, with 39% of these selling above the list price.
Despite booming demand for conventional and luxury real estate, land supply remains tight in the City of Toronto and across the GTA, resulting in the rapid absorption of available resale, new construction and pre-construction inventory. With Ontario’s economic growth forecast to advance by 5.6% in 2021 according to the Conference Board of Canada, and with the GTA poised as Canada’s epicentre for population and economic growth as pandemic travel and immigration restrictions ease, the region’s optimistic economic outlook is set to elevate the demand for conventional and top-tier real estate into the third quarter of 2021.
Montreal
Low interest rates, a sustained shift to work-from-home, and general pandemic-driven lifestyle changes that contributed to demand for more space, were among the factors that fueled record-breaking sales activity and price gains across the City of Montreal’s conventional and luxury real estate market through the first half of 2021. As top-tier inventory plummeted, bidding wars increased to unprecedented levels for the city, while sales velocity accelerated to tempos that broke records. According to the Quebec Professional Association of Real Estate Brokers, it took an average of 44 days to sell a residential property in Montreal in the first quarter of the year, 24 days less than one year prior and the shortest first-quarter selling time on record.
The onset of buyer and industry fatigue in a heated sellers’ market did little to diminish the city’s record-breaking luxury sales activity. Overall, the City of Montreal saw 990 $1 million–plus residential real estate transactions (condominiums, attached and single family homes) in the first half of 2021, an increase of 112% from the same period in 2020. Sales between $1–2 million rose 107% to 807 properties sold, while sales activity between $2–4 million rose 138% to 169 properties sold in the first half of the year. 14 properties sold over $4 million, more than double the six properties sold in this price range in the first half of 2020. While ultra-luxury sales were dormant in the first half of 2020, one ultra-luxury property sold above $10 million on MLS in the first half of 2021. Overall, 30% of properties which sold over $1 million did so above list price in the first half of 2021, an indicator of the city’s extraordinary market conditions despite the challenges of the pandemic.
Despite decreased activity earlier in the pandemic, Montreal’s $1 million–plus condominium market rebounded with a 104% year-over-year increase in home sales to 210 units sold in the first half of 2021. $1–2 million condo sales made up the bulk of activity in this market, with 188 units sold in the first half of 2021, up 109% year-over-year. $2–4 million condo sales similarly increased 75% with 21 units sold, compared to 12 such transactions in 2020. $4 million-plus condo sales remained consistent with one unit sold in both the first half of 2021 and 2020. Notably, one condominium sold above $10 million in the first half of 2021, marking the highest recorded MLS® condominium sale in Quebec’s history. Listed at $12.9 million by Sotheby’s International Realty Quebec, the sale of the penthouse at the Ritz-Carlton Residences in Montreal to a U.S. buyer reflected the city’s growing prominence as a global real estate destination.
Surpassing Montreal’s luxury condominium market performance was that of the city’s $1 million-plus single family home market, which experienced the most significant year-over-year sales gains with a 112% surge in sales volume to 436 homes sold. 72% of these sales occurred in the $1–2 million range, with 315 homes sold, an increase of 98% year-over-year. Significant gains were also recorded in the market for homes between $2–4 million at 108 homes sold, an increase of 157% from the year prior. Luxury single family home sales over $4 million also saw substantial growth with 13 homes sold, an increase of 160% year-over-year. Of the single family homes sold over $1 million, 28% did so above asking price.
Sales of attached homes over $1 million increased 118% year-over-year in the first half of 2021 to 344 properties sold. 304 of these homes sold between $1–2 million, up 116% from the first half of 2020. Attached home sales between $2–4 million also posted growth, with 40 homes sold, an increase of 135% year-over-year. 40% of attached homes sold over $1 million did so at above list price.
As pandemic restrictions ease, experts anticipate Montreal’s luxury real estate market will continue to flourish. However, pent-up local and global demand and tight supply will continue to pose an uphill battle for prospective buyers and constrain activity in an otherwise red-hot market.
For more information on Sotheby's International Realty Canada and the 2021 Top-Tier Mid-Year Real Estate Report, contact:
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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 neighbourhoods 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 resulting from any use of, reliance on or reference to the contents of this document.
