Canada’s luxury real estate market experienced a challenging yet opportunity-filled 2024. Between political uncertainty, new taxes, and regulatory changes, the market demonstrated resilience. Thanks to strong population growth, declining interest rates, and pent-up demand, the sector appears poised for a rebound in 2025, according to Sotheby’s International Realty Canada’s annual report.
One of the key factors influencing market dynamics has been unprecedented immigration. In 2023, Canada welcomed 471,771 new permanent residents, with an additional 485,000 expected in 2024. This massive influx of potential buyers has intensified housing demand. Furthermore, the Bank of Canada’s monetary easing, initiated in June, has boosted consumer confidence and encouraged the transition of buyers from the conventional to the luxury market.
October and November saw significant increases in sales, with month-over-month growth of 7.7% and 2.8%, respectively, highlighting positive year-end momentum.
The Greater Toronto Area (GTA) emerged as the driving force behind Canada’s luxury real estate recovery. Sales of properties over $4 million surged by 21% in 2024, with single-family homes accounting for 91% of transactions. The ultra-luxury segment, exceeding $10 million, also saw a 20% increase, with 24 properties sold. Declining interest rates and improved alignment between buyer and seller expectations were crucial factors in this revival.
Calgary stood out with spectacular growth, recording a 42% increase in sales of properties over $1 million and a doubling of transactions above $4 million. With a 5.9% population growth rate, driven by interprovincial migration and immigration, housing demand intensified, leading to price increases and solidifying Calgary’s position as a competitive real estate market.
Montreal’s luxury market showed remarkable resilience, with a 38% increase in sales of properties over $1 million and a 16% rise in transactions above $4 million. The condominium segment particularly stood out, with a 53% year-over-year growth in sales above $1 million. Limited inventory and greater alignment between seller and buyer expectations contributed to improved market dynamics.
Unlike other major cities, Vancouver’s luxury segment experienced a slowdown. Sales of properties over $4 million declined by 11% in 2024, primarily due to a gap between seller expectations and cautious buyer behavior. However, late-year activity showed promise, particularly in the condominium sector, where sales of properties exceeding $4 million rose by 26%.
According to Don Kottick, CEO of Sotheby’s International Realty Canada, declining interest rates and more realistic seller pricing should continue to support market improvements. He emphasized that the revitalization of the real estate market in Toronto and Montreal is an encouraging sign that could extend nationwide. The convergence of seller pricing expectations and increased real estate mobility presents exciting opportunities for buyers looking to invest in the high-end market.
With falling interest rates, growing demand, and favorable market adjustments, 2025 could be the ideal year to invest in Canada’s luxury real estate sector.
