Population growth, lack of inventory put stress on real estate market “Unprecedented” population pressures from immigration and interprovincial migration are “dramatically reshaping” the country’s conventional and luxury real estate market, Sotheby’s International Realty Canada reports. “In the last three years, Canada has added 2.8 million new homebuyers to our marketplace,” says president and CEO Don Kottick.
“We’ve had a decade-long chronic shortage of housing inventory relative to our population so the addition of these buyers looking for real estate is putting a lot of stress on the market right across the country.” All major Census Metropolitan Areas saw their fastest growth since 2001–2002 in the year ending July 1, 2023, according to the most recent Statistics Canada data. Calgary led the charge with a 5.
9 per cent growth, followed by Edmonton and Vancouver at 4.1 per cent, Toronto at 3.3 per cent and Montreal at 2.
9 per cent. But immigration only tells part of the story. “The migration of residents, and their talent and financial capital away from cities like Toronto and Vancouver to communities in surrounding regions or to provinces such as Alberta foreshadow trends in sales activity, housing prices and real estate market performance,” Kottick says.
According to Sotheby’s Top-Tier Real Estate: 2024 Mid-Year State of Luxury Report, the Greater Toronto Area (GTA) luxury real estate market remained balanced in the first half of 2024. “Toronto is a destination for a lot of new people coming into the marketplace. All these new people have buoyed up the economy so we’re not seeing what could have been a recession.
..On the other side, a very high cost of living is causing a lot of people to think about what they’re going to be doing,” says Kottick.
Especially in the Toronto market, searches are taking longer, buyers are more discerning and negotiations are taking longer, not only in the luxury and ultra luxury but also in the conventional market as well, he adds. In the first half of the year, $4 million-plus residential sales in the GTA saw what Sotheby’s describes as a “modest” eight per cent annual gain to 300 properties sold on the Multiple Listings Service (MLS) and a four per cent increase in the City of Toronto. Meanwhile, $10 million-plus residential sales on MLS fell 57 per cent and 40 per cent across the GTA and Toronto, respectively.
In Calgary, sales of homes exceeding $1 million increased 46 per cent year over year, while sales of properties priced at more than $4 million increased a whopping 75 per cent. In Montreal, residential sales over $4 million were up 29 per cent year-over-year and sales of properties priced at $1 million-plus increased by 25 per cent. On the west coast, Vancouver’s luxury market saw “subdued” consumer sentiment and sales in the spring despite increased inventory and activity early in the year.
Sales of luxury homes over $4 million dropped 16 per cent year-over-year, while sales of ultra-luxury properties over $10 million were down 50 per cent..
