Sales over $4 million set records in Toronto as momentum normalizes in Vancouver; $1 million-plus activity renews in Calgary & Montreal reports healthy gains.
Toronto, ON. (January 11, 2017) – A report released today by Sotheby’s International Realty Canada revealed significant shifts in the performance of key Canadian top-tier real estate markets in 2016. The country’s four major metropolitan centres reflected resilience in spite of major domestic and global changes, as local market fundamentals emerged as the dominant forces in reshaping market performance across the country.
The Greater Toronto Area (Durham, Halton, Peel, Toronto and York) dramatically accelerated its rapid pace of growth to lead Canada’s four major metropolitan centres with $1 million-plus sales surging 77% year-over-year, and luxury sales over $4 million rising 95% over 2015 figures. Following years of record-setting gains, Vancouver’s top-tier real estate sales slowed in the latter half of 2016 as a series of municipal, provincial and federal policy changes, including the introduction of a 15% foreign buyers’ tax, amplified a trend towards market moderation that had emerged over the summer. While sales volume over $1 million declined 34% year-over-year in the last half of 2016 compared to the same period in 2015, annual sales over $1 million remained consistent with 2015 levels, with a nominal 1% year-over-year decline. Vancouver’s luxury real estate sales over $4 million increased 36% overall in 2016 compared to 2015.
Top-tier real estate activity in Calgary increased in 2016 despite the city’s continued economic challenges, as motivated sellers entered the market with adjusted pricing. $1 million-plus residential real estate sales activity increased 19% year-over-year. A stable provincial economy and political landscape resulted in a healthy 23% gain in Montréal’s $1 million-plus sales volume over 2015.
“Toronto’s luxury real estate market shattered previous performance records for the second straight year and defied industry expectations,” says Brad Henderson, President and CEO of Sotheby’s International Realty Canada. “At the same time, in light of the unexpected and unrelenting changes that rippled across the housing industry in 2016, the top-tier real estate markets in Vancouver, Calgary and Montreal demonstrated tremendous resilience, and in many cases sheer defiance, to post healthy performance across the board.”
According to Henderson, local market factors such as inventory constraints or oversupply, regional economic performance, levels of local consumer confidence and domestic demand, prevailed in shaping the top-tier real estate market even as major changes in municipal, provincial and federal policy directly impacted the sector and the housing finance system in 2016. Similarly, global political and economic headwinds were tempered by regional trends and hyper-local real estate conditions.
Canadian top-tier real estate market highlights included:
Following a record-breaking first half of 2016 that sent real estate sales rising another 26% to 3,111 properties sold, the city of Vancouver’s top-tier market normalized in the second half of the year. From July 1 to December 31, 2016, 1,404 properties sold over $1 million, down 34% from the first six months of 2015. With intensifying demand from homebuyers seeking alternatives to single family homes, $1 million-plus attached home sales increased 38% year-over-year to 612 properties sold. Sales of condominiums over $1 million increased 48% year-over-year with 1,008 sales in 2016 compared to 679 units in 2015.
- Overall, the city’s annual $1 million-plus residential real estate sales (condominiums, attached and single family homes) remained in line with 2015 performance, declining 1% year-over-year, with 4,515 units sold compared to 4,578 units in 2015.
- Luxury real estate sales over $4 million experienced an overall 36% year-over-year increase to 573 sales in 2016.
- Single family home sales over $1 million fell 47% from 2015 levels in the second half of 2016, in total, 2,895 homes sold over this price point in 2016, a modest decline of 16% from 2015.
- In spite of a 35% year-over-year decrease in $4 million-plus sales in the last half of the year compared to the same period in 2015, the annual sales volume of homes sold in this luxury price range increased 34% overall.
Calgary’s top-tier real estate sales activity stabilized in 2016, as prices adjusted to better align with buyers’ market conditions. Following 2015, a year in which $1 million-plus residential real estate sales volume (condominium, attached and single family) decreased over 40% compared to 2014, sales over $1 million increased 19% year-over-year to 612 units sold in 2016.
- Sales of $1 million-plus single family homes, Calgary’s predominant top-tier housing category, increased 22% year-over-year to 548 homes sold in 2016 even as attached home sales over $1 million held steady with a marginal 4% decline to 45 units sold.
- In spite of two sales by Sotheby’s International Realty Canada in 2016 that set city records for the highest sold prices for condominiums listed on MLS over the past three years at $8,389,500 and $5,145,000, $1 million-plus condo sales remained consistent when compared to 2015, with 19 units sold.
Greater Toronto Area (GTA)
In 2016, the Greater Toronto Area exhibited the strongest sales gains of Canada’s four major metropolitan markets for the second straight year, with real estate sales over $1 million (condominiums, attached and single family homes) up 77% year-over-year to 19,692 properties sold compared to 11,112 units in 2015. This exceeded the 48% gain in sales over $1 million in 2015 over 2014.
- In the city of Toronto alone, $1 million-plus and $4 million-plus real estate sales increased 44% and 87% respectively, to 7,799 and 209 properties sold.
- Sales of $1 million-plus single family homes sustained heated growth across the GTA: sales were up 77% year-over-year in 2016 with 17,553 of homes sold.
- Sales over $4 million increased 96% with 272 units sold compared to 139 units sold in 2015.
- As in 2015, the percentage gain in sales volume of $1 million-plus attached homes exceeded that of all other residential housing types, as rising single family home prices drove buyers to purchase 1,324 units in 2016, an annual increase of 101%.
- Top-tier condominium market activity was strong throughout the year: sales over $1 million were up 51% in the GTA with 815 units sold in 2016.
Montréal’s top-tier real estate market experienced healthy growth in 2016 as modest gains in Quebec’s provincial economy, enduring political stability and steady consumer confidence sustained positive real estate market conditions.
- Overall, real estate sales over $1 million increased 23% year-over-year with 613 properties (condominiums, attached and single family homes) sold in 2016.
- Luxury sales over $4 million increased 29% with nine units sold in 2016, compared to seven units sold in 2015.
- Both single family and attached home sales over $1 million increased 25% year over year to 334 units and 197 units sold respectively.
- While the completion of new condominium developments and the addition of new inventory softened prices, the volume of condominiums sold over $1 million increased 14% year-over-year to 82 properties.