In its 2024 Top-Tier End-of-Year Real Estate Report, Sotheby's International Realty Canada describes this past year as having been a "tumultuous landscape" for luxury real estate.
In closing out the quarter-century, Sotheby's highlights political and economic uncertainty, housing taxes, sweeping regulatory overhauls, and rising inventory levels as obstacles to sales activity. But competing headwinds balanced out the landscape and, overall, the luxury market saw some substantial growth by the end of 2024.
The highlights: luxury homes over $4 million increased 21% year over year in the Greater Toronto Area (GTA), sales over $1 million and $4 million saw annual gains of 42% and 100%, respectively, in Calgary, and Montreal saw notable growth with annual gains of 38% in sales over $1 million and 16% for sales over $4 million.
President and CEO of Sotheby's International Realty Canada Don Kottick tells STOREYS the overall growth can be attributed to a number of factors. “Population growth probably had one of the biggest impacts on the market, especially in Toronto, and declining rates had a big impact on the market as well,” he says. “And, you know, the pent-up buyer demand never really extinguished, but population growth and interest rates would really be the key drivers of the luxury market in 2024.”
In Calgary, for example, the substantial gains in luxury real estate this past year are largely attributed to a record-breaking population increase as the city saw an annual growth rate of 4.9% between April 2023 and April 2024.
But across the country, interest rate cuts have driven sales activity in both the conventional and luxury markets. "Even though affluent real estate buyers and sellers are typically insulated from the effects of mortgage rate changes, the swift series of consecutive interest rate cuts improved consumer confidence and enabled upward mobility from conventional markets into the entry-level top-tier segment," explains the report.
Greater Toronto Area
In the GTA, luxury home sales experienced a "resurgence," says Sotheby's, driven by "surging population and housing demand, resilient consumer confidence and the adaptation of seller expectations to rebalanced market conditions."
Overall, sales over $4 million climbed 21% year over year and ultra-luxury sales over $10 million were up 20%, though homes prices over $1 million only saw a 1% increase from 2023.
As was seen across most other major markets, single-family homes sales bolstered GTA demand with $4 million-plus single-family homes up 22% year over year, making up 91% of all residential sales in that tier. In comparison, $4 million-plus condominium sales were up by a lesser 12% compared to 2023, there were zero sales recorded over $10 million, and sales over $1 million were down 9% year-over-year.
The lack of sales on the condominium front, despite rate cuts and population growth can be largely attributed to Toronto's condo market crisis, where a stalemate between buyer and sellers over price has led to plummeting sales and skyrocketing listings.
"Buyers' market conditions deepened across the Greater Toronto Area luxury condominium market throughout 2024, driven by a shift in affluent consumer demand toward single family homes, and an accumulation of unabsorbed listings inventory," says the report. "By the end of the year, buyers’ market dynamics were entrenched as the new standard, with stiff negotiation and favourable compromises in prices and conditions becoming the norm for astute purchasers."
Vancouver
The only major market that saw marked declines in sales over 2024 was the City of Vancouver. While other city centres responded to shifting market conditions with renewed confidence, BC buyers became more cautious and adopted what Kottick calls a "wait-and-see" attitude in anticipation of further rate cuts.
“Early in the year, we saw this uptick, and we were really optimistic that it was going to carry forward. But then it started to slow in the spring and summer, and then buyers just took a wait-and-see approach in terms of the market,” say Kottick. “The one missing ingredient that is really evident in all the other major centres was the expectations and the gap between the buyers and sellers.”
Starting with the bad, overall luxury sales over $4 million were down 11% year over year at 296 properties sold, while sales over $10 million declined by 29%, with 15 properties sold. On the up side, properties priced between $1 million and $4 million saw a year-over-year increase of 6% to 3,833 transactions.
What demand there was in Vancouver was driven by single-family homes, which represented 89% of all residential transactions over $4 million and 39% over $1 million. Still, sales for homes priced above the $4 million mark saw significant declines over the course of 2024 as "buyers, particularly move-up buyers in the entry-level top-tier market, remained cautious, prioritizing affordability amidst economic uncertainty and elevated mortgage rates," says the report.
As for luxury condominium sales, 2024 was not a "banner year," says Sotheby's, as just two ultra-luxury condo sales over $10 million were recorded on MLS and condos over $1 million remained relatively stable with a slight 3% year-over-year uptick. At the same time, condominium sales over $4 million saw a gain of 26% year over year.
Calgary
In what should be no surprise to those following monthly sales reports throughout the year, Calgary led luxury home sales in Canada by a landslide, outstripping Toronto, Vancouver, and Montreal in annual percentage gains in sales over $1 million and $4 million, at rates of 42% and 100%, respectively.
In Calgary, a whopping 82% of real estate transactions over $1 million were single-family homes, and those saw a year-over-year increase of 34%. The growth in single-family home sales is attributed to intense population growth driving prices up into the luxury arena, but Sotheby's foresees this trend easing in 2025.
In a stand-out category for the city, luxury attached home sales surged in 2024, with sales over $1 million rising by 130% year over year. Less substantial, but still notable growth was recorded in the condo market, with sales of $1 million-plus condominiums increasing by 31% year over year.
According to Sotheby's, Calgary is ripe for growth and investment in 2025 as well. "The city’s rate of economic growth is expected to outpace that of the national economy in the year ahead," says the report. "A more favourable financing environment and a larger population base will also boost household consumption, encourage business investment, elevate housing demand and encourage construction."
Montreal
Things were relatively peachy for Montreal in 2024, with all-around healthy growth reported. Overall sales over $1 million increased 38%, sales over $4 million grew by 16%, and both single-family and condominium luxury homes saw substantial gains. By the end of the year, single-family and attached home sales over $1 million grew by 38% and 27% year-over-year respectively and condos saw a 53% jump in sales.
"Limited inventory supported steady price growth, while greater alignment between sellers’ asking prices and bids from prospective buyers resulted in more successful negotiations and improved sales activity," explains Sotheby's. "While market conditions shifted to favour sellers by the end of 2024, buyers were optimistic yet pragmatic and were willing to transact only on appropriately priced properties and without overextending themselves. This dynamic resulted in a healthy balance in the top-tier market."
Looking To 2025
In the early days of 2025, interest rates are significantly lower than they were a year ago, with more cuts on the horizon, and pent-up demand continues to drive sales that first began to climb again towards the end of the year. Looking ahead, Kottick predicts continued stable growth, even for the condo market.
“Going into 2025, we still have the drivers. There’s still record levels of immigration [...] but we're really seeing a stabilization in the top-tier luxury market that will drive a stronger market in 2025,” says Kottick. “We also see that there's still going to be buying opportunities, especially in the luxury condo market, which has lagged behind. So we're actually quite optimistic about the luxury market in all the major centres right across the country.”
At the same time, economic bulwarks from the geopolitical realm, such as proposed 25% tariffs from the US on all Canadian goods, threaten to hit Canada's real estate sector hard. Still, Kottick remains positive. “I'm optimistic that the tariffs won't come about, or that we’ll negotiate something that will soften them,” he says. “He’s threatened them in the past, and hasn't brought them in, so I’m optimistic.”
