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The post Transformation in Canada’s luxury real estate market: Sotheby’s 2023 recap and outlook for year ahead appeared first on REM.

As an associate broker, Flavel created the Okanagan Group’s foundation and grew it to become a highly successful and dynamic real estate team, according to a press release from Sotheby’s. He is a repeat recipient of “Best Realtor in the Okanagan,” as voted by readers of Okanagan Life and Kelowna Now. Most recently, he was awarded the Queen Elizabeth II Platinum Jubilee Medal for his longstanding commitment to the community.

President and CEO of Sotheby’s International Realty Canada, Don Kottick, applauds Flavel’s leadership expertise in real estate and the community. Kottick says in a press release, “(Flavel’s) exemplary leadership and business acumen will help agents continue to grow their business in an evolving market and support the brand as we continue to grow strategically.”

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According to Sotheby’s International Realty Canada’s Top Tier Real Estate: Fall 2022 State of Luxury Report, Canada’s most sought-after postal codes saw muted sales activity over the summer months and into the initial weeks of fall, with fewer homes listed for sale from Jul. 1 to Aug. 31.

“The market is still absorbing the effects of rapid-fire interest rate hikes, as well as changes in the domestic and global economic landscape, and real estate sellers and buyers are taking a step back to strategize,” says Don Kottick, president and CEO of Sotheby’s International Realty Canada, in a press release.

“It is critical to note, however, that the primary challenge within major metropolitan housing markets, particularly in Toronto and Vancouver, is a chronic undersupply of housing,” Kottick adds. “Demand-side policies and taxes, including bans and taxes on foreign buyers, will offer little benefit while creating unintended consequences when Canada is striving to attract and retain people with desperately needed skills and talent.”

According to Kottick, prices are stabilizing, and prospective buyers and investors are no longer willing to pay bullish prices.Properties priced correctly for current market conditions are seeing activity and sales; those priced too ambitiously are languishing on the market.

Regional highlights

The Greater Toronto Area:

• Residential sales over $4 million fell 42 per cent year-over-year.
• Three properties sold for more than $10 million on MLS, compared to six units the previous summer.
• Overall, residential sales over $1 million declined 39 per cent in the summer of 2022.
• Preliminary fall data foreshadows a tempered market ahead, as luxury sales over $4 million in the GTA were down 63 per cent in September year-over-year between Sept. 1 to 30.
• The $10 million-plus market, which saw three properties sold last September, remained quiet on MLS.
• Overall residential sales over $1 million saw an annual decline of 52 per cent in September.

Vancouver

• From Jul. 1 to Aug. 31, luxury residential sales over $4 million fell 51 per cent from the record summer of 2021.
• Two properties sold over $10 million on MLS compared to one sold in the summer months of last year.
• $1 million-plus residential sales were down 37 per cent year-over-year overall during this time.
• Luxury sales in September signal a return to moderated levels of market activity, as residential sales over $4 million receded 58 per cent from September 2021 levels
• Sales over $1 million declined 70 per cent year-over-year.
• The city’s ultra-luxury $10 million-plus market, however, remained active, with two sales recorded on MLS between Sept.1 and 30 compared to one property sold in this price range during the same period last year.

Montreal

• $4 million-plus residential real estate market, which saw sales volume increase 71 per cent year-over-year in the first half of 2022 to new highs, gradually tapered to balanced conditions in the third quarter of 2022.
• From Jul. 1 to Aug. 31, $4 million-plus residential sales remained relatively stable with a nominal decline to eight transactions compared to nine in the previous summer levels.
• Sales over $1 million were down 26 per cent year-over-year.
• Luxury sales in the city in September reflect a market coming into balance with two properties sold over $4 million between Sept. 1 and 30 compared to six sold in the same month last year.
• Overall, September sales of over $1 million were down 39 per cent.

Calgary

• Residential sales over $1 million remained stable over the summer with a mild 12 per cent year-over-year contraction in sales volume between Jul. 1 and Aug. 31.
• One property sold for more than $4 million over the summer, on par with the summer of 2021.
• In September, sales over $1 million remained largely comparable with September 2021 levels, with sales tightening five per cent.

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Quite simply, homes in major cities like Calgary and Edmonton are more than half the price of the averages in the Greater Toronto Area and Greater Vancouver Area – and that’s enticing people to come to Alberta in waves.

“The reason for that is affordability,” says Justin Havre, broker and owner at Justin Havre & Associates in Calgary. He says his team has experienced a considerable influx of buyers inquiring about properties in and around Calgary. “Affordability is a huge factor. The lifestyle that Calgary offers. The common theme we hear from people in Toronto is they work to pay their living expenses, whereas when they come to Calgary, they can have a lifestyle that’s not all revolving around work and paying their bills,” says Havre.

“Some have even cashed out from the Ontario market, purchased a home in Calgary for a third of what it would have in Toronto to have the same or similar home; and some sold their house, became mortgage-free and even semi-retired because it allowed them to do that.”

Havre believes the trend will continue as the Alberta government makes a concerted effort to attract new talent to fill vacant jobs. Homeownership remains out of reach for so many in Toronto and Vancouver. That’s why more and more people are considering making a move to Calgary. 

When asked how many Calgary transactions he’s helped facilitate from out of province in the past year, Havre replied: “Well into the three figures. At one point in time, seven out of every 10 people contacting us were from out of province and from Ontario. We had one family that picked up five properties on the same block,” Havre recalls. “And we had multiple families that purchased for themselves to live but also picked up investment properties. It’s been a pretty interesting year.”

The numbers are staggering. According to Statistics Canada, in 2021/2022, 29,422 people moved from Ontario to Alberta. British Columbia had 28,238 making the jump one province over. Those numbers are significantly higher than the previous year. In 2020/2021 when 12,708 people in Ontario moved to Alberta, and 13,790 from B.C. did the same.

The numbers when it comes to home prices are even more staggering. According to the Canadian Real Estate Association, in September, the MLS Home Price Index benchmark price in the Greater Vancouver Area was nearly $1.17m, while it was close to $1.16m in Toronto. For Calgary, it was $521,300, and Edmonton was even more affordable at $382,800. Alberta’s prices are also significantly lower than other major BC and Ontario cities such as Victoria, Ottawa, Hamilton and Mississauga.

Christopher Alexander, President of Re/Max Canada, says Alberta, particularly Calgary and Edmonton, are seeing strong sales and price appreciation in the condo market right now. 

A recent national report by Re/Max indicated buyers from out of province – typically British Columbia and Ontario – continue to pour into Calgary and invest in the city’s housing stock. Economic fundamentals continue to improve in the province overall; consumer confidence is on the upswing, and housing markets in both Calgary and Edmonton reflect the provincial return to growth and prosperity.

“Alberta is seeing huge immigration from those two provinces . . . So you’ve got the really low cost of housing, and lots of disposable income, which is great for the local economy because people are continuing to spend on going out for dinner, events and shopping. We’re still seeing a lot of that in British Columbia and Ontario, but people are a lot more conscious of what they spend, especially in this high inflationary market,” Alexander adds.

“I’m personally very bullish on that province because it’s been so dependent on oil for so long, and obviously it still is, but we’re seeing big investments in other sectors, namely technology, which is attracting a lot of people as well.”

Phil Soper, President and CEO of Royal LePage Canada, said Canada has seen a fundamental shift in inter-provincial migration starting at the beginning of the pandemic.

“Traditionally, if you go back over the decades, there have been two or three provinces that have gained in population from the flow of people between provinces. This is taking immigration off the table,” he said.

“They were Ontario, Alberta and B.C. Sometimes Alberta would fall off the list. It fell off the list at the end of 2014 with the collapse of oil prices. But in general, those three provinces changed during the pandemic and Ontario, our most populous province, became a net donor to the rest of the country. The big gains in order were Alberta, Atlantic Canada, BC and Quebec . . . The rate of exit has slowed somewhat, but it has not stopped. Right now, Alberta has emerged from the pack as the number one recipient of migrating Ontarians.”

He said provinces like Alberta will be a big gainer because the cost of living is lower and “the living is easy.”

“As a former Albertan, born and raised and lived there for many years, it’s a nice place to live. The climate may be a little harsher than southern Ontario but not materially. People are outdoorsy, and they adapt.

“When I started in this real estate industry, which was right around 2000, Calgary was the second most expensive city in Canada . . . It went to Vancouver, Calgary, and Toronto. Now home prices are half of what they are in Toronto and Vancouver. But that could change. You continue to see the economic boom brought on by $100 oil, and if the Alberta Advantage continues to draw people from elsewhere in the country, you could see home prices in Calgary and Edmonton escalating at a rate above the national value.”

Don Kottick, President and CEO of Sotheby’s International Realty Canada, said the trend of people from B.C. and Ontario moving to Alberta will likely continue into the foreseeable future.

“In terms of affordable markets, Montreal, like Calgary, is leading the way, and I guess there’s a great standard of living, a high standard of living; you couple that with the lower cost of living, I think Alberta will continue to be a destination,” Kottick says, adding a million-dollar home in Alberta gives a homeowner much more home than one that’s priced the same in Vancouver or Toronto.

Recognizing the discrepancy in home prices, the Alberta government launched its Alberta is Calling campaign in the Toronto and Vancouver markets to attract skilled, educated and motivated talent to consider moving their careers and future west.

The campaign highlights the many cost-of-living, career, and lifestyle advantages of life in Alberta, including:

• Highest average wages and lowest taxes in the country
• Homeownership in a major city for a fraction of the cost
• Shorter average commute times
• Career opportunities in emerging and growing industries
• Easy access to world-famous mountain parks for year-round hiking, skiing, biking and over 300 days of sunshine per year.

The campaign cites CREA data on home prices in Alberta and the Demographia International Housing Affordability study, released in March 2022, which named Edmonton and Calgary among the top 10 most affordable housing markets when compared to 92 major cities around the world.

Mario Toneguzzi

Mario Toneguzzi is a contributing writer for REM. He has more than 40 years of experience as a daily newspaper writer, columnist, and editor. He worked for 35 years at the Calgary Herald, covering sports, crime, politics, health, faith, city and breaking news, and business. He now works on his own as a freelance writer for several national publications and consultant in communications and media relations/training. Mario was named in 2021 as one of the Top 10 Business Journalists in the World by PR News – the only Canadian to make the list.

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The physical business cards use near field communications (NFC) technology to make it easier for agents to share their contact information with potential clients. They enable agents to share contact and business information to another smartphone with a tap of the card onto a recipient’s NFC-eligible mobile device. With this tap, the agent’s Sotheby’s International Realty Canada 

Agent ID contact card opens on the recipient’s device with the option for them to instantly add the agent’s contact to their smartphone, making  information-sharing touchless. An agent’s professional information, including contact details, business specialties, service areas and professional social media accounts are instantly shared. 

Each  Sotheby’s agent has a unique QR code that is accessible to them on the company’s proprietary cloud-based marketing and real estate brokerage management software, Gateway. Each personalized QR code is also printed on the agent’s business card in case a  prospective contact prefers to save their information by scanning a QR code, rather than using the NFC-technology enabled tap.

Agents may also add their personalized digital business card to their smartphone’s Apple Wallet or Google Pay as a digital wallet card.

“In a world that is increasingly digital and touchless, Agent ID physical and digital business cards simplify the exchange of professional information in a way that is both seamless and strategic,” says Tahan Martins, director of brand innovation. “As a company, we are proud that this latest technology addition positions our agents and brokers as being on the leading edge of real estate business innovation with each networking interaction.”

The cards enable agents to share contact and business information to another smartphone with a tap of the card onto a recipient’s NFC-eligible mobile device.

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