Is now the time to invest in luxury homes?
Canada’s luxury real estate market experienced a challenging yet resilient 2024, shaped by contrasting factors such as political uncertainty, housing taxes, and regulatory overhauls. Despite these pressures, strong population growth, declining interest rates, and pent-up demand stabilized the sector, setting the stage for a more active market in 2025, according to Sotheby’s International Realty Canada’s annual report.
Unprecedented immigration contributed significantly to housing demand, the report noted. Canada welcomed 471,771 new permanent residents in 2023, with an additional 485,000 targeted for 2024. The Bank of Canada’s monetary easing, which began in June, bolstered consumer confidence and spurred mobility from conventional to luxury housing segments. October and November saw significant sales activity increases—7.7% and 2.8% month-over-month, respectively.
Regional market insights
Greater Toronto Area (GTA)
The GTA led the revival of Canada’s luxury real estate market, with sales of properties over $4 million climbing 21% year-over-year in 2024. Single-family homes dominated, accounting for 91% of these transactions. Ultra-luxury sales above $10 million rose 20%, with 24 properties sold. Declining interest rates and harmonized seller-buyer expectations played pivotal roles in revitalizing the market.
Calgary
Calgary emerged as a standout performer, recording a 42% increase in luxury sales over $1 million and a 100% rise in $4 million-plus transactions. The city’s 5.9% population growth, driven by interprovincial migration and immigration, intensified housing demand and prices, reinforcing Calgary’s position as a competitive market.
Montreal
Montreal’s luxury market showed resilience, with $1 million-plus property sales rising 38% and $4 million-plus sales increasing 16%. The city saw significant growth in the condominium segment, with sales above $1 million climbing 53% year-over-year. Limited inventory and greater alignment between buyer and seller expectations improved market dynamics.
Vancouver
In contrast, Vancouver’s luxury market lagged, with sales of properties over $4 million declining 11% year-over-year. Misaligned seller expectations and cautious buyer behavior contributed to stalling transactions. However, late-year activity provided some optimism, particularly in the condominium segment, where $4 million-plus sales rose 26%.
Don Kottick, CEO of Sotheby’s International Realty Canada, highlighted easing interest rates and realistic seller pricing as key factors for ongoing market improvement. “Toronto and Montreal’s broad-based real estate market revitalization reflects the changes in market dynamics that are needed to stimulate housing mobility and sales nationwide: sellers are engaging in realistic pricing which enables constructive negotiations, while falling interest rates are gradually enabling upward mobility from the conventional into the top-tier and luxury markets,” he stated.
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