Luxury Real Estate Market Remains Stable
Updated: Aug 2, 2022
The luxury real estate market in Canada will remain stable as the overall market normalizes while buyers take a ‘wait-and-see’ position, says the ‘2022 Mid-Year Luxury Real Estate Market Report’ by Engel & Völkers. The report says that with residential construction costs growing by 25 per cent year-over-year in 2022’s first quarter, the resale market is poised to be favourable for homebuyers and investors. At the start of 2022’s second quarter, the Bank of Canada increased interest rates. This triggered market normalization, helping to bring more balanced conditions to Canada’s real estate markets. Engel & Völkers forecasts that the market will continue to normalize throughout the second half of the year. It also expects that once market prices stabilize, waiting buyers will return and market competition will accelerate again. It expects luxury markets to remain stable in Canada, as real estate remains an attractive investment. Units sold in the $1 million to $3.99 million range in Halifax, NS, increased by 68.7 per cent year-over-year, credited to the growing value of real estate in the market. Montreal, QC’s luxury condo market continues to grow, with the average selling price in the $1 million to $3.99 million range rising 14 per cent from last year. Ottawa, ON, home sales in that range have doubled, accounting for 18 per cent of the market compared to nine per cent last year. Toronto, ON, experienced its first price correction in recent decades following interest rate hikes. The average selling price for condos in the $1 million to $3.99 million range is up only four per cent from last year, signalling the onset of balanced market conditions.