The momentum from a record-breaking pandemic year will last much longer than anticipated
In the wake of a year that defied all pandemic-induced doldrums, the Canadian luxury home market is expected to see a wave of “market normalization” well into fall 2021, along with a likely dynamic year in 2022, according to a new analysis by Engel & Völkers.
Much of the strength in the market for homes valued at $1 million or higher was apparent in Halifax, Montreal, Ottawa, Toronto, and Vancouver, Engel & Völkers stated in its Mid-Year Canadian Luxury Real Estate Market Report.
“As pandemic restrictions ease, Canadian homebuyers are returning to city living, prompting a sales uptick for luxury condos in downtown cores,” Engel & Völkers said. “Pent-up demand for Canada among international buyers will also drive sales once borders reopen and travel restrictions lift.”
An emerging trend that the market should watch out for is the growing preference for multi-generational living, “with families pooling resources to invest in high-end properties together,” Engel & Völkers added.
Read more: What’s happening with Canada’s luxury housing market?
Halifax continues to attract a high volume of local and national buyers, with out-of-province buyers accounting for almost half of those purchasing homes over $1 million since December 2020. Meanwhile, Montreal has become a favourite among condo and single-family property investors, and the market is expecting a substantial influx of new luxury inventory over the next three years.
Ottawa’s high-end housing market is gaining momentum, particularly in its core and periphery. Toronto benefited from its luxury condo inventory retaining its value despite the pandemic, and sales are now back on the rise. Vancouver saw accelerating luxury demand in the first half of 2021, with many recognizing real estate as a strong and stable investment.
“After an unprecedented run, premium real estate markets are normalizing across Canada’s most in-demand cities, and that’s a good thing,” said Anthony Hitt, president and CEO of Engel & Völkers Americas. “At a global level, Canada’s real estate market is largely undervalued. But with low housing inventory and the buyer frenzy we saw in the first half of the year, Engel & Völkers believes the unprecedented demand for luxury properties will sustain.”
“Local demand for luxury housing increased exponentially during the pandemic and international buyers are excited to return after a year of border closures. 2022 will be a year to watch,” Hitt concluded.
