Tag: Buyers

Posted on

Canada luxury real estate market sales fall but don’t blame buyers

Canada luxury real estate market sales fall but don’t blame buyers

People are eager to buy homes, if only there were enough listings

Published Apr 19, 2023  •  5 minute read

Sales of luxury real estate properties were slower in the first quarter of 2023 compared to the same time last year.
Sales of luxury real estate properties were slower in the first quarter of 2023 compared to the same time last year. Photo by Tyler Anderson/National Post

Good morning,

Luxury home sales retreated across much of Canada this past winter, but a lack of buyers isn’t to blame for the pullback and the market is expected to pick up this spring, according to Sotheby’s International Realty Canada.

Sales of luxury real estate properties were slower in the first quarter of 2023 compared to the same time last year, with Toronto, Vancouver, Montreal and Calgary all registering declines, says Sotheby’s latest report on the state of high-tier housing.

Toronto and Vancouver, the most expensive housing markets in Canada, bore the brunt of the slump in sales. In Toronto, sales of luxury homes priced $4 million and higher fell 64 per cent from the first quarter of 2022. Transactions of houses above $1 million also slowed, declining 57 per cent over last year. Vancouver sales of residences over $4 million were down 53 per cent year over year, and sales of dwellings above $1 million fell by 51 per cent.

Montreal’s market also climbed down from 2022 levels, with sales of luxury properties above $1 million declining 43 per cent in the first quarter compared to last year. Residences priced at $4 million and higher experienced a slowdown in sales, too, falling 33 per cent year over year.

Meanwhile, Calgary remains a bright spot in the market amid a growing economy that’s attracting new residents from other parts of Canada. But it too experienced slower sales when compared to the same time last year. Sales of $1-million homes fell 36 per cent compared to the first quarter of 2022. However, Sotheby’s says sales are up 223 per cent compared to the same time in 2020, which shows the underlying strength of the market.

The overall drop in home sales isn’t a sign that buyers have given up on homeownership, however. Sotheby’s blames a lack of listings for the downturn in transactions, and says people are ready and eager to get back into the market to find their dream homes.

“A significant cohort of prospective homebuyers and sellers who were reluctant to make a move in 2022 … are now pre-qualified, highly motivated and anxious to find a home that meets their needs and lifestyle,” Don Kottick, chief executive of Sotheby’s International Realty Canada, says in a press release.

Investors also continue to have faith in real estate, with recent research from Sotheby’s and Mustel Group showing that 60 per cent of city-dwelling Canadians believe property will outperform or line up with their other investments over the next 10 years.

That high confidence, combined with pent-up demand, bodes well for the spring housing market, the report says, providing there is enough inventory to meet buyer intentions. Sotheby’s says many sat on the sidelines this winter, in the hope of more inventory coming online in the second quarter. But listings are expected to stay muted, which will likely constrain sales.

“The greatest challenge that (buyers and sellers) are facing is a sheer lack of housing supply across every price point and housing type,” Kottick said. “This shortage is placing a chokehold on real estate markets that would otherwise be primed for healthy activity.”

Still, don’t expect a lack of listings amid a cohort of motivated buyers to translate into big price gains this spring. Higher interest rates that have pushed up the costs of homeownership are keeping people from bidding up prices further, Sotheby’s says. Indeed, inflation data from Statistics Canada released on April 18 shows mortgage interest costs increased 26.4 per cent last month from March 2022. That should continue to keep a lid on home prices this spring, even as the market picks up.

“Properties priced appropriately for the market will see qualified interest and uptake in the coming months,” Kottick said.

_____________________________________________________________

Was this newsletter forwarded to you? Sign up here to get it delivered to your inbox.
_____________________________________________________________

Inflation appears to finally be slowing, which means interest rate increases are likely off the table, at least for now, writes Kevin Carmichael.

The consumer price index increased 4.3 per cent from March 2022, Statistics Canada said on April 18. That was the smallest year-over-year increase since August 2021.

Excluding food and energy, the year-over-year increase was 4.5 per cent, down from 4.8 per cent in February. Excluding mortgage interest costs, the index increased 3.6 per cent, compared with 4.7 per cent the previous month.

Still, though headline inflation is lower to four per cent than its eight per cent peak, it might not feel like much a of a relief for many households. Find out more about what you need to know about the latest consumer price reading.

___________________________________________________

  • 150,000 PSAC members comprised of Canada Revenue Agency and Treasury Board workers walk off the job today in what will be the largest federal public service work stoppage since 1991. Here’s what you need to know about how demands for wage increases could affect inflation
  • Suzanne Clark, chief executive of the U.S. Chamber of Commerce, attends a breakfast event in Ottawa, organized by the American Chamber of Commerce in Canada in partnership with the Business Council of Canada and the Canadian Chamber of Commerce
  • Canada 2020 hosts the Net-Zero Leadership Summit in Ottawa. Speakers include Environment Minister Steven Guilbeault and Northwest Territories Premier Caroline Cochrane
  • Imperial Oil Ltd. holds its 2023 investor day and provides an update on its operations and business strategy
  • The United States Federal Reserve Board releases the latest Beige Book report
  • Today’s data: Canadian housing starts, industrial product and raw materials price indices
  • Earnings: Tesla Inc., Morgan Stanley, IBM Corp., Kinder Morgan Inc., Nasdaq Inc., Equifax Inc., Metro Inc., Alcoa Corp.

___________________________________________________

_______________________________________________________

____________________________________________________

Rich people have problems, too, but the advice financial planner Ed Rempel provides for one couple trying to ensure a comfortable retirement applies just as much to the rest of us as it does to them. Do we have enough money to maintain our lifestyle? How can we pass some money to our kids in a sensible way? Where should I park the capital that’s currently sitting in guaranteed investment certificates? Retirement advice this way.

____________________________________________________

Today’s Posthaste was written by Victoria Wells (@vwells80), with additional reporting from Financial Post staff, The Canadian Press, Thomson Reuters and Bloomberg.

Have a story idea, pitch, embargoed report, or a suggestion for this newsletter? Email us at posthaste@postmedia.com.

Comments

Postmedia is committed to maintaining a lively but civil forum for discussion and encourage all readers to share their views on our articles. Comments may take up to an hour for moderation before appearing on the site. We ask you to keep your comments relevant and respectful. We have enabled email notifications—you will now receive an email if you receive a reply to your comment, there is an update to a comment thread you follow or if a user you follow comments. Visit our Community Guidelines for more information and details on how to adjust your email settings.

Join the Conversation

Posted on

Canada’s luxury real estate enters buyer’s market as prices come down

Canada’s luxury real estate enters buyer’s market as prices come down

Prices easing as sellers adjust to new realities of market, Sotheby’s says

Luxury real estate prices are expected to be lower in 2023.
Luxury real estate prices are expected to be lower in 2023. Photo by Tyler Anderson/National Post

Canada’s luxury real estate market cooled significantly last year, setting 2023 up for a buyer’s market across much of the country as prices come down.

Both buyers and sellers retreated from the luxury housing market in Toronto, Vancouver and Montreal in 2022, creating new benchmarks for prices and sales, Sotheby’s International Realty Canada said in a report out this morning. Calgary was the one outlier, buoyed by strong migration and a healthy economy.

But for the rest of Canada, high inflation, rising interest rates and fears of a recession dampened market activity as sellers held onto their properties in hope of better conditions, and buyers sat on the sidelines waiting for prices to come down.

The Greater Toronto Area’s luxury market statistics tell the tale of 2022. Last year, sales of all homes over $4 million declined 24 per cent from 2021, and sales of homes above $10 million — known as ultra-luxury properties — fell 29 per cent. Sales of residences costing $1 million or more also declined by 28 per cent.

That was evidence of buyers’ willingness to sit back and wait for better prices and more properties to hit the market, even as demand for homes remained strong, Sotheby’s said.

But buyers won’t be deterred for much longer. As inflation slowed at the end of the year, the appetite for homes became harder to ignore — just in time for the market to shift in favour of buyers. That means prices will ease because sellers have adjusted to the new realities of the market, Sotheby’s said.

“By the end of the year, luxury housing segments in several major metropolitan areas were on the brink of buyers’ market conditions, while others had clearly shifted into this territory,” Don Kottick, chief executive of Sotheby’s said in a news release. “The market is now on the verge of another important adjustment, this time in terms of pricing.”

Sotheby’s expects prices to be lower than the heady days of 2021 this year, even as listings grow. That dynamic will likely draw more buyers back into the market, eager to snap up properties at valuations they’ve long been waiting for.

“Prices will shift to meet current realities,” Kottick said. “This will start to unlock long-awaited opportunities for buyers and upsizers to purchase homes that meet their lifestyle needs as they acclimatize to the market.”

Activity in Vancouver’s luxury real estate market is expected to bounce back as a result, Sotheby’s said. As interest rates pushed mortgage rates higher last year, Vancouver’s buying frenzy cooled, and the region experienced major declines in sales. Homes priced above $4 million and $10 million languished on the market as buyers pulled back, and sales volumes were 30 per cent and 46 per cent lower, respectively, than they were in 2021. Sales of homes above $1 million fell 29 per cent. Prices also eased, and are expected to continue to moderate in the coming months.

In Montreal, conditions were more balanced last year. Bidding wars, which were the norm in 2021, became less common and homes took longer to sell. Sales of residences priced above $1 million declined 18 per cent, but houses above $4 million eked out a two per cent gain in sales. Sotheby’s expects prices to cool some more in 2023, but not so much that the market tips in favour of buyers. Sellers will also benefit from a balanced market, the report said.

Meanwhile, Calgary’s market showed continued signs of strength as people flocked to Alberta from other parts of the country. Sales of homes priced higher than $1 million rose by 16 per cent compared to 2021, and sales of homes above $4 million grew by 50 per cent. That put the region in sellers’ market territory, and Sotheby’s expects the market to keep gaining strength in the first part of this year. But in good news for buyers, conditions should become more balanced as new listings come online.

Still, inventory will remain a problem in some big cities, including Vancouver and Toronto, as demand outstrips supply, Kottick said. And as more immigrants flow into the country, demand will only increase. That means prices aren’t likely to get as low as some buyers may have hoped.

“Although housing prices are expected to adjust downward to realistic market norms in several major metropolitan areas, pent-up demand for housing mobility as well as anticipated population gains from immigration will continue to support housing values in the long term,” the report said.

_____________________________________________________________

Was this newsletter forwarded to you? Sign up here to get it delivered to your inbox.
_____________________________________________________________

Canada’s main measure of inflation dropped to its slowest rate in almost a year, a positive change, but one that will complicate the Bank of Canada’s decision on what to do with interest rates, writes the Financial Post’s Kevin Carmichael.

The consumer price index increased 6.3 per cent from December 2021, down from 6.8 per cent the previous month and the smallest year-over-year increase since the index rose 5.7 per cent in February 2022, Statistics Canada reported on Jan. 17. The drop in the headline number was mostly the result of lower gas prices. Excluding food and energy, inflation rose 5.3 per cent from December 2021, down only marginally from 5.4 per cent in November.

What does that mean for interest rates? Read the full story to find out more.

___________________________________________________

  • NDP Leader Jagmeet Singh will deliver a keynote address to his caucus during their three-day retreat in Ottawa
  • The standing committee on government operations and estimates meets to discuss a request to undertake a study of contracts awarded to McKinsey & Company
  • Adam van Koeverden, parliamentary secretary to the minister of health and to the minister of sport, on behalf of Francois-Philippe Champagne, minister of innovation, science and industry, will be announcing the recipients of support from INOVAIT’s Focus Fund
  • The Economic Club of Canada hosts an event called “Challenges and Opportunities Facing the Future of Canada’s Natural Resources”
  • Francis Drouin, parliamentary secretary to federal Agriculture Minister Marie-Claude Bibeau, tours the Toronto laboratory of Genecis Bioindustries. The company, one of six finalists in the Novel Technologies Stream for the Food Waste Reduction Challenge, is converting food waste into compostable and biodegradable plastics
  • Melanie Joly, Minister of Foreign Affairs, and James Cleverly, Secretary of State for Foreign, Commonwealth and Development Affairs of the United Kingdom will hold a press conference during his visit to Canada
  • Dan Vandal, Minister for PrairiesCan, will outline federal support to ensure the continued growth and competitiveness of technology and technology-enabled Calgary businesses as they expand and create new jobs for Albertans
  • Agriculture Minister Marie-Claude Bibeau travels to the United Kingdom to meet counterparts and deliver remarks at the International Grains Council Grains Forum and then to Germany to attend the Berlin Agriculture Ministers’ Conference 2023
  • Today’s data: Canadian industrial product and raw materials price indices; U.S. retail sales, producer price index, industrial production and capacity utilization, NAHB housing index, business inventories
  • Earnings: Kinder Morgan Inc., Charles Schwab, Alcoa Corp.

___________________________________________________

_______________________________________________________

____________________________________________________

The stock market has been rocky, but that doesn’t mean you should stop investing — you might just want to branch out. This is where alternative investments come in. Alternative investments — assets other than stocks — can help hedge against inflation, protect your wealth from downside risk and potentially enhance portfolio returns. Thanks to one disruptive startup, an alternative investment has finally been made accessible to everyday investors — fine art. Our content partner MoneyWise explains how to invest in art.

____________________________________________________

Today’s Posthaste was written by Victoria Wells (@vwells80), with additional reporting from Financial Post staff, The Canadian Press, Thomson Reuters and Bloomberg.

Have a story idea, pitch, embargoed report, or a suggestion for this newsletter? Email us at posthaste@postmedia.com, or hit reply to send us a note.

Listen to Down to Business for in-depth discussions and insights into the latest in Canadian business, available wherever you get your podcasts. Check out the latest episode below:

Comments

Postmedia is committed to maintaining a lively but civil forum for discussion and encourage all readers to share their views on our articles. Comments may take up to an hour for moderation before appearing on the site. We ask you to keep your comments relevant and respectful. We have enabled email notifications—you will now receive an email if you receive a reply to your comment, there is an update to a comment thread you follow or if a user you follow comments. Visit our Community Guidelines for more information and details on how to adjust your email settings.

Posted on

Canadian luxury real estate entering ‘buyer’s market’: Report

Canadian luxury real estate entering ‘buyer’s market’: Report

Canadian luxurious real estate might be shifting into buyer’s market place situations this 12 months, according to a new report from Sotheby’s International Realty Canada, as prices readjust from pandemic-similar upheaval.

The report issued Wednesday reported potential buyers and sellers retreated from the luxury market in 2022 as the housing industry responded to troubles like fascination level hikes, large inflation and regulatory troubles, location the stage for selling prices to neat this calendar year amid continued need for housing.

Don Kottick, president and CEO of Sotheby’s International Realty Canada, reported luxurious housing segments in some Canadian metropolitan regions had been both approaching or already in buyer’s market circumstances by the stop of 2022, and he predicted an additional “important adjustment” on pricing on the horizon in the coming months.

“It has taken many months for property sellers to realize the effects of the shifting current market on the market values of their properties. As new residence listings come on to the industry in 2023, their pricing will change to meet up with existing realities,” Kottick claimed in a prepared statement.

“This will start off to unlock lengthy-awaited prospects for consumers and upsizers to obtain properties that meet their lifestyle requires as they acclimatize to the sector.”

Sotheby’s report found luxury sales fell yr-more than-calendar year in big Canadian towns. In the Bigger Toronto Area, household genuine estate gross sales over $4 million fell nearly a quarter from 2021 to 2022, and income above $10 million fell 29 for every cent. 

Vancouver also observed a sharp decline in superior-finish true estate sales, notably in the very first quarter of the 12 months, with residential income in excess of $4 million falling by 30 for every cent by the finish of 2022. Residential profits more than $10 million fell 46 for each cent from 2021 stages.

The report stated Montreal’s luxury serious estate industry “tempered to far more balanced conditions” more than the course of final calendar year, with household product sales above $4 million close to 2021 amounts and an 18 per cent yearly decrease in product sales action for residences in excess of $1 million.

Calgary was an outlier that outperformed other metropolitan places and observed sales of properties more than $1 million increase 16 for every cent from 2021 to 2022. Sales around $4 million mature 50 for each cent, the report explained, with 6 qualities marketed in that rate variety. The report said the city’s solid economy “ignited client confidence” even though interprovincial migration contributed to escalating desire for housing.

Kottick famous that housing deficits will continue to challenge housing marketplaces in significant cities in 2023, and while rates are anticipated to go down, pent-up desire and immigration populace gains “will continue to assist housing values in the prolonged phrase.”

New policies aimed at restricting foreign participation in the housing sector “will have a negligible influence on affordability” and have confuse d potential new Canadians, he extra.

Posted on

Buyers are asking about pickleball, the new ‘hot’ perk in luxury real estate development | Real Estate

Buyers are asking about pickleball, the new ‘hot’ perk in luxury real estate development | Real Estate

It is believed that above 4.5 million individuals are participating in pickleball, making it one particular of the fastest developing athletics in the US, which has attracted the attention of luxury true estate developers. Now, pickleball courts are a perk being supplied in several substantial-end communities.

For example, Cipriani Residences Miami in Brickell, developed by Mast Capital, a organization launched by Camilo Miguel, Jr., describes itself as a group exactly where “residents will enjoy a lifetime of effortless class.” Amid its amenities are a state-of-the-artwork health center, a golf simulator, and a pickle ball court. 

Toll Brothers, a person of the leading builders of luxurious properties, offers pickleball and bocce ball courts in its latest enhancement in Florida’s Treasure Coastline Port St. Lucie, Toll Brothers at Tesoro Club, as part of an amenities offer that features an 18-gap PGA championship-stage Palmer golf program

Pickleball is a sport that can be savored equally indoors or outdoor and combines things of tennis, badminton and ping-pong played on a badminton-sized courtroom.

The United states Pickleball web-site claims the activity was invented in 1965 by 3 dads -– Joel Pritchard, Monthly bill Bell, and Barney McCallumare — on Bainbridge Island, a quick ferry trip from Seattle, Washington.

For genuine estate builders, the level of popularity and growth of the sports activities, which is played every day at the Vital Biscayne Group Heart, will make it an best perk to supply as they are somewhat low-cost to set up, taking up small room. The courts are 44 feet extended and 20 feet wide and expense from $20,000 to $45,000, according to a report by the site LocalToday.

The Tal Aventura – a 26-story, 86-unit residential tower in Aventura — will include pickleball courts. “Everyone and their mom are playing pickleball currently,” stated Matthew Rosenblatt, president of Miami-primarily based 2151 Growth.

“You have youngsters who participate in pickleball, you have mother and father who engage in pickleball. It lets all ages and demographics to come jointly,” included Rosenblatt.

Pickleball courts will also be current at the planned Common Residences in Midtown Miami and A person Park Tower at SoLé Mia in North Miami, getting developed by Rosso Team.

Jorge Perez’s Linked Group has several tasks in the performs. Casamar Residences, Residences at Bal Harbour, St. Regis Residences Miami and Casa Bella Residences by B&B Italia will all include things like pickleball courts.

Wendy Pines, revenue director for the Casamar Residences, which start off at $1.5 million, lately informed Barron’s that “Buyers are surely inquiring about pickleball.”

And builders can be innovative in acquiring ways to add pickleball to their offerings. Typical Residences in Midtown, Miami’s very first true Pied-A-Terre group, designed an indoor courtroom that can be transformed into a social gathering place.