Market Normalizes For Luxury Real Estate

The market normalization trend for homes priced over $1 million in Canada's most in-demand metropolitan real estate markets established in the first half of the year continued across the country. Despite this, luxury markets in Canada are holding their value, but prices are adjusting downwards from their inflated values in some parts of the market, says Engel & Völkers’ ‘2022 Year-End Luxury Real Estate Market Report.’ The increase in interest rates at the start of 2022's second quarter triggered market normalization, helping to bring balanced conditions to Canada's real estate markets. Decreased sales volume and replenished inventory are causing price growth to plateau or decline in some areas of the market. Price declines are most common in the conventional market, especially in periphery markets which saw exponential growth during COVID. However, well-located, quality inventory continues to increase in value year-over-year, though the growth rate has slowed.