In the luxury real estate market, there is a period of calm before the storm of activity that will start as early as January, as those who are knowledgeable take advantage of the opportunity to buy and sell before the spring market unfolds, according to Don Kottick, president and CEO of Sotheby’s International Realty Canada.
As we wrap up 2024, mortgage rates are decreasing. Many buyers postponed their purchases until 2025, choosing to wait and see. However, there is an increase in pre-transaction activity as those planning to enter the market in 2025 start reaching out to their Realtors and begin their searches in anticipation of buying.
Luxury markets already seeing increased activity
Kottick mentions that there has been a rise in the traditional luxury market, particularly in Toronto for homes priced above $4 million and in Vancouver above $5 million. Calgary and Montreal are still relatively affordable. Single-family homes are in high demand with a chronic shortage.
Buyers are expecting rates to remain stable, and those who find the right home are ready to jump into the market after the holidays, according to Kottick. Engel & Völkers Chief Financial Officer Andrew Dinsmore states that mortgage rate increases are not as disruptive to the ultra-premium markets, as these buyers typically purchase homes with a large portion of the equity paid upfront.
Anita Springate-Renaud, broker of record at Engel & Völkers Toronto Central, adds that the luxury market in the Toronto area, ranging from $5 million to $10 million, has not been affected by mortgage rates. Buyers in this market often use a significant amount of cash and other forms of financing to make their purchases.
Inventory is scarce in urban markets
Springate-Renaud notes that luxury properties outside the city are moving slowly, but inside Toronto, things are picking up. There is limited inventory on the market, and properties in the $5 million to $10 million range are still attracting potential buyers. Ontario’s cottage country and horse country markets have experienced a slowdown.
The spring real estate market starts early in Toronto, with many homeowners listing their properties to take advantage of less competition. Sellers are advised to get their properties on the market sooner rather than later to stay ahead of increasing inventory.
Realtors should learn the nuances of each property
Dinsmore suggests that real estate advisors specialize in their local neighborhoods to understand the nuances of each property. This knowledge helps clients evaluate whether they are getting a fair deal and can vary significantly from house to house and street to street.
Here are a few luxury and ultra-luxury properties on the market in Canada.
Address: 30 High Point Rd. Toronto
Price: $28 million
Details: 8 bedrooms, 13 bathrooms
Listing agent: Jane Zhang, Sotheby’s International Realty Canada
MLS# C9003662
A rare landmark residence in the quietest part of the Bridle Path, this mid-century masterpiece is nestled into a 2.12-acre landscape that includes lush landscaping for privacy. The Canadian Tire founder’s concrete mansion was designed by architect John C. Parkin.
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