Luxury home sales are expected to climb in the second quarter as pent-up demand buoys real estate activity in most major markets across Canada, says RE/MAX Canada in a report released on Tuesday.
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The Spotlight on Luxury Report, which examined 15 Canadian markets, said luxury sales have posted gains in the first quarter of this year from the last quarter of 2022 in most major Canadian markets.
It also 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, said the report.
Christopher Alexander
“Much of the activity in the market can be attributed to pent-up demand, which has been building since mid- 2022,” said 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 proved challenging.”
“Inventory continues to be the lynchpin of the Canadian housing market. 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.”
The report said sidelined buyers jumped back into the market in Q1, as anticipated inventory failed to materialize and housing values stabilized. Supply levels are now tighter than they were during the pandemic in some markets. Also, a lack of available homes listed for sale have served to prop-up housing values across the country, despite softer overall demand.
Elton Ash
“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,” said 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.”
The full report and a market by market overview can be found here.
(Mario Toneguzzi is Managing Editor of Canada’s Podcast. He has more than 40 years of experience as a daily newspaper writer, columnist, and editor. He worked for 35 years at the Calgary Herald, covering sports, crime, politics, health, faith, city and breaking news, and business. He works as well as a freelance writer for several national publications and as a consultant in communications and media relations/training. Mario was named in 2021 as one of the Top 10 Business Journalists in the World by PR News – the only Canadian to make the list)
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