2022 Year-End Canadian Luxury Real Estate Market Report

Year-End 2022

Engel & Völkers

Canadian Luxury Real Estate Market Report

Introduction

Engel & Völkers welcomes you to its year-end Canadian Luxury Real Estate Market Report. On-the-ground intel from local Engel & Völkers experts combined with market data informs our analyses and serves as the basis for trends and forecasting. Homes priced $1 – 3.99 million and over $4 million as listed on the MLS were evaluated throughout the year. The result is a residential property and market report for Halifax, Montréal, Ottawa, Toronto and Vancouver with notable highlights from key markets throughout the country.

National Overview

Special statement on the foreign buyer ban

On January 1, 2023, The Prohibition on the Purchase of Residential Property by Non-Canadians Act, known as the foreign buyer ban, took effect. This measure will be in effect for two years and is intended to slow housing price growth and curb demand, helping build Canada’s real estate inventory. Since the introduction of the policy, it has become abundantly clear that Canadian markets are already experiencing results intended by this ban. Non-residents represent less than four per cent of residential property owners in most parts of Canada, including Ontario and British Columbia. Since 2020, demand in Canada has been overwhelmingly local. While global buyers certainly do have an impact on the Canadian market, Canada’s housing supply problem is not primarily driven by international buyers. Therefore, the possible impact of the ban remains unclear.

Engel & Völkers currently operates approximately 275 shop locations with over 6,200 real estate advisors in the Americas, contributing to the brand’s global network of over 16,400 real estate professionals in more than 31 countries. For international buyers seeking to purchase real estate in Canada, it is important to work with real estate advisors who are well-versed in the policies and exemptions of the foreign buyer ban and other tax measures placed on non-residents on a provincial basis. You may want to consider obtaining your own legal counsel regarding how to navigate this new policy.

Highlights

■  The foreign buyer ban applies to census metropolitan areas and census agglomerations.

■  Recreational properties are exempt as well as buildings containing more than three dwelling units.

■  Select foreign nationals, international students, diplomats and consular workers qualify for exemptions.

Sales volume of luxury condos grew in Vancouver and Halifax, and for all homes in Ottawa

While the national story has been defined by a notable dip in home sales volume following interest rate hikes, sales of luxury condos bucked the trend in Vancouver and Halifax.

In Vancouver, the annual sales volume for condos priced between $1 – 3.99 million grew by 95 per cent year-over-year from 2,434 to 4,752, with 62 per cent of these sales taking place in the first half of the year.

The luxury market in Halifax is still emerging, accounting for 2.6 per cent of all units sold in 2021. In 2022, this number grew to 4.5 per cent. In Halifax, sales of condo units priced between $1 – 3.99 million also grew from 13 in 2021 to 20 in 2022.

Ottawa’s $1 million-plus market saw the sales volume for all property types increase, now making up 12 per cent of the market compared to nine per cent in 2021. This increase occurred as the total sales volume across all price points in Ottawa dropped to its lowest level in eight years and by 25 per cent from the previous year.

While sales volume dropped in Toronto and Montréal, prices in the $1 million-plus segment largely held due to demand

As the sales volume decreased across the country following a series of interest rate hikes, average sold prices followed suit in many parts of the conventional market. However, in Montréal and Toronto — two in-demand Canadian real estate destinations — the average sold price held despite a marked decrease in the sales volume.

For example, in Montréal, the sales volume for all property types combined in the $1 – 3.99 million bracket decreased by 55 per cent from the first half of the year to the second, but the average sold price dipped by only 1.6 per cent for residential class properties and increased by 11 per cent for condos yearover-year. Similarly, Toronto condos in the $1 – 3.99 million bracket saw the average sold price grow by approximately six per cent year-over-year in December, while the annual sales volume decreased by 18 per cent.

Canada’s real estate market pace will increase once interest rate hikes stabilize

Last year represented a period of adjustment as the Bank of Canada brought interest rates back up after historic lows during the pandemic. Market fluctuations will be less dramatic as buyers and sellers acclimatize to stable market conditions. When stability returns, would-be buyers and sellers will feel comfortable making transactions in the market again. If low supply is not addressed, this could lead to steady price increases due to demand outpacing supply.

Supply shortage in Canada remains the main obstacle to affordability

There was a disconnect between buyers and sellers as they scrambled to adjust to new market conditions. While buyers were nimble and tended to work in real-time, sellers did not adjust as quickly, and some were reluctant to list. Even as demand relaxed and prices softened, supply was slow to replenish, especially in regions where the supply shortage is amplified. With Canada now setting targets to welcome approximately 500,000 new immigrants annually by 2025, there will be upward pressure on the rental and housing market.

Skilled labour shortage an obstacle to new supply

A shortage of skilled tradespeople in Canada is affecting new construction. This, coupled with other rising costs related to materials, labour and taxes, will be an obstacle to building the new supply Canada needs. The construction industry will be short nearly 29,000 workers by 2027.1

Rental markets in urban areas spike as Canadians return to office

Rent costs spiked in excess of 20 per cent in some of Canada’s major cities year-over-year. The catalyst for this was two-fold. First, as cities fully re-opened over the course of 2022, renters returned. Second, would be buyers held off from purchasing due to interest rate hikes, putting added pressure on the rental market.

Canada at a Glance 2022

12.5%

Calgary sales volume grows by 12.5%

“The Calgary real estate market enjoyed a recordbreaking year. Since 2021, the sales volume has increased by 12.5 per cent in the $1 million-plus range,” says Chris Margetts, vice president of operations, Engel & Völkers Calgary.

Waterloo is still riding the high of the hot market

“Interest in Waterloo Region has peaked. Despite the shifting market conditions in the third quarter, five sales over $2,500,000 were closed, indicating that buyers were willing to pay top dollar for the right property,” says Dennis Mehravar, license partner, Engel & Völkers Waterloo Region.

Engel & Völkers opens shop in Sun Peaks

“Matt Town and I are excited to expand Engel & Völkers’ footprint in British Columbia. Our new location, located 50 meters from the Burfield chairlift, will service Sun Peaks and the surrounding area,” says Chris Town, license partner, Engel & Völkers Sun Peaks.

Okanagan re-sale market ripe for real estate investors

“The Okanagan real estate market continued to normalize throughout the end of the year, with the median sales prices dipping by 5 – 20 per cent from its peak in March, dependent on segment, category and area. With some uncertain homebuyers sitting on the sidelines, there are exciting investment and homebuying opportunities in the region,” says Suzie Doratti, license partner, Engel & Völkers Okanagan.

Engel & Völkers opens shop in Bluewater region

“We look forward to opening our doors in Bayfield, Ontario, servicing the Grimsby and Bluewater areas. The region has seen growth in the last few years which we expect to continue,” says Mary Couturier, license partner, Engel & Völkers Grimsby.

Greater Victoria region balances

“The Greater Victoria market is returning to a manageable pace after two frenetic years. While the sales volume dropped 32 per cent year-overyear in October, the average price stayed strong, dipping only 6.7 per cent for homes priced over $1 million,” say license partners James Leblanc and Scott Piercy, Engel & Völkers Victoria Oak Bay.

Whistler property among Canada’s most expensive listings

“Overlooking Alta Lake, the cleverly designed 5462 Stonebrige Drive was the highest priced listing in Canada at $39,000,000,” says Maggi Thornhill, license partner, Engel & Völkers Whistler.

Healthy shift to balanced market in Toronto suburbs

“The interest rate hike has worked to balance the Greater Toronto Area real estate market, especially in suburban areas. By year’s end, the average sale price has decreased by 12.5 per cent year-over-year in the GTA for homes priced over $1 million,” says Ron Amendola, license partner, Engel & Völkers Toronto Uptown.

Record-breaking listing: 25 & 31 Veronica Gene

“With more people leaving nearby major cities like Toronto, northern Ontario’s luxury market proves to be a year-round destination. Increasing demand has generated record-breaking listings, including 25 & 31 Veronica Gene on Lake Joseph,” says Matt Smith, license partner, Engel & Völkers Parry Sound.

Halifax

Welcome to Halifax

Compared to other major Canadian cities, Halifax is among the most affordable. Following a period of significant home value increases, Halifax has seen minor price movement in the $1 –3.99 million segment and conventional markets in 2022. Unlike other metropolitan markets, the average sold price in the $1 – 3.99 million range during the third and fourth quarters was higher than the first two quarters despite two of the largest interest rate hikes occurring in this period.

Through the remainder of 2022, the average sold price for properties in the $1 – 3.99 million segment fluctuated between $1.25 million and $1.35 million before landing on $1,171,714 in December, a 21 per cent decrease from the annual high of $1,481,725 across all property types in November.

Residential home sales breakdown

Spring market conditions carried through to summer with July recording the second highest number of new listings in the $1 - 3.99 million range. Still, the month saw the lowest number of new listings in more than 15 years across all price points, falling just over four per cent below the five-year average and nearly 11 per cent below the 10-year average. Month-over-month, sales for residential class properties in the $1 – 3.99 million segment fell by 57 per cent — despite this, the average sold price dropped by just under three per cent month-over-month as inventory was outpaced by demand in the Halifax Regional Municipality (HRM).

In August, new listings decreased by 16 per cent month-overmonth in the $1 – 3.99 million range for all property types combined. Like July, August recorded the lowest number of new listings added for the month in more than 15 years across the entire market. However, the market entered balanced territory in August due to shrinking sales volumes with three months of inventory available across all price points. In the $1 – 3.99 million range, units sold decreased by eight per cent month-over-month for all property types.

Donna Harding, license partner Engel & Völkers Nova Scotia

Annual sales volume of homes priced over $1 million reaches 4.6% in 2022, up from 2.6% in 2021.

“ While some are waiting to see where the market will land, buyers can relax as properties are selling close to the list price. Sellers are willing to work with buyers to negotiate deals and conditions. Inventory is still low compared to demand; therefore, new buyers can purchase with confidence as prices are stable. ”

Engel & Völkers Halifax

Price decreases were muted due to low inventory in the HRM. In the $1 – 3.99 million category, the average sold price decreased by two per cent month-over-month before climbing back up by two per cent in September.

While September saw the sales volume for homes priced between $1 – 3.99 million jump by 91 per cent month-over-month despite the interest rate hike, home sales in the overall market were nearly 20 per cent below the five-year average and seven per cent below the 10-year average for the month. In the $1 –3.99 million segment, new listings remained virtually unchanged and residential class property prices increased by two per cent month-over-month.

As new listings in the $1 – 3.99 million range accumulated, units sold decreased by 24 per cent month-over-month in October. Together, these two factors pushed the average sale price back down to January levels in the $1– 3.99 million bracket. While two new listings priced over $4 million hit the market in October, there were no sales in this segment.

The average sold price saw an annual high of $1,578,451 in November for residential class properties in the $1 – 3.99 million range. As new listings of residential class properties priced between $1 – 3.99 million decreased by 51 per cent month-over-month, the sales volume hit an annual low after a 44 per cent decrease.

December saw activity decrease both due to seasonal trends and market normalization activity brought about by higher interest rates. Residential class properties priced between $1 –3.99 million saw new listings drop to 14, tying the annual low in January. In this price range, the sales volume dropped by 36 per cent for all property types combined.

While the $4 million-plus market recorded no sales between July and December, it saw one new listing in August and two new listings in October.

Market outlook

After two years of accelerated prices and demand, sellers are willing to work with buyers and accept conditional offers. The market has balanced with 4.8 months of inventory available in the $1 – 3.99 million range at year’s end as buyers and sellers wait to see how conditions develop. Engel & Völkers predicts the HRM may see increased demand in the spring once the interest rate hike cycle comes to an end, especially as the region expects an influx of new residents with five large onshore wind farms scheduled to begin operation by 2025.

$4M +

1. Chester

2. South End

3. Northwest Arm

$1–3.99M

4. Halifax Peninsula

5. Head of St. Margaret’s Bay

6. Bedford

7. Yarmouth

8. Wolfville

9. Antigonish

Montréal

Prices hold in $1 – 3.99 million range as sales volume drops 55% from first half of year.

Welcome to Montréal

In the second half of the year, Montréal’s real estate market continued to gradually balance. In Toronto and Vancouver, $1 million represents the approximate cost of a starter single-family detached home. This is not the case in Montréal, where this price point is largely comprised of ultra luxury buyers, not firsttime or second-time buyers. As such, interest rate hikes’ effects were more muted in Montréal as compared to other major Canadian cities. With a disconnect between buyer and seller expectations, the summer market was challenging. However, the market returned to typical patterns in the fall.

While demand for resale condos is still high from first-time homebuyers looking to enter the market, new construction has seen demand taper off. New construction is typically attractive to investors, who are on the sidelines because they are not seeing the same return on investment due to the interest rate hike. Even with the decrease in demand, new construction is still booming in Montréal — compared to Toronto and Vancouver, developers are not as easily spooked by a slower pre-sale cycle as historically it would take three years to sell 80 per cent of the units in a project.

In the $1 – 3.99 million segment, the average sold price for condos and residential class properties hovered around $1.43 million throughout the entire year. At year-end, the average sold price in this range was $1,552,346 for condos, an annual high for the year, and $1,524,821 for residential class properties, a two per cent decrease from the peak in September.

Residential home sales breakdown

The Montréal real estate market came to a standstill in July. In the $1 – 3.99 million range, new listings decreased by 27 per cent and the sales volume decreased by 43 per cent monthover-month for all property types combined. Despite the marked decrease in sales volume, prices remained relatively stable due to low inventory, especially in the $1 – 3.99 million range. The average sold price for condos in this range dropped by 13 per cent in June while residential class properties saw this climb by three per cent month-over-month.

“ There is a disconnect between sellers who are still expecting exorbitant prices and buyers who are looking for deals. Instead of trying to time the market, fall in love with the house that fits your needs, as the long-term investment will still prove to be a good move. ”

Patrice Groleau, license partner Engel & Völkers Montréal

August showed Montréal’s market is rebalancing more gradually than other cities. New listings in the $1 – 3.99 million range increased by 10 per cent across all property types while the sales volume saw no change month-over-month. For homes listed between $1 – 3.99 million, the average sold price increased by one per cent for residential class properties and two per cent for condos from July.

In September, inventory began to pile up. In the $1 – 3.99 million bracket; new listings grew month-over-month by 20 per cent for residential class properties and 55 per cent for condos, marking the second highest number all year. Simultaneously, sales volume for condos priced between $1 – 3.99 million saw an annual low, down 63 per cent from the annual peak in March. Even with the influx of new listings and shrinking sales volume, prices remained stable. Residential class properties in the $1 – 3.99 million bracket saw the average sold price peak in September at $1,560,329 after climbing by five per cent month-over-month. In the $4 million-plus segment, the average sold price hit an annual low in September of $4,445,000 after a 23 per cent month-over-month decrease. These dramatic price swings are because of the limited number of units traded in Montréal’s emerging $4-million-plus market.

Residential class properties in the $1 – 3.99 million segment saw the average price hit an annual low of $1,420,317 in October following a nine per cent decrease month-over-month. At the same time, condos in this range saw the average sold price

climb by seven per cent. Both August and October saw the second lowest number of units sold for condos priced between $1 – 3.99 million.

Demand edged up in the $1 – 3.99 million segment in November, with units sold increasing by 25 per cent across all property types month-over-month. The average sold price crept up by six per cent for residential class properties and three per cent for condos month-over-month in the $1 – 3.99 million range.

In the $1 – 3.99 million segment, the average sold price for condos and residential class properties hovered around $1.43 million throughout the whole year. As the year came to a close, the average sold price in this range was $1,552,346 for condos, an annual high for the year and $1,524,821 for residential class properties, a two per cent decrease from the peak in September.

Market outlook

The watch-and-wait holding pattern that defined much of the second half of 2022 will come to an end as buyers and sellers adjust to new market conditions. As Montréal’s market stabilizes, it’s essential to accurately price a property rather than intentionally underpricing to elicit a bidding war. Sellers should expect their properties to spend more days on the market as was typical pre-COVID. While Engel & Völkers is predicting a five per cent dip in prices, the sales volume will remain similar to previous years.

$4M +

1. Westmount

2. Town of Mount Royal

3. Outremont

$1–3.99M

4. Le Plateau-Mont Royal

5. Rosemont

6. Villeray / Ahuntsic

7. East Island / Hochelaga

8. Lasalle

9. Saint-Laurent

Ottawa

Sales volume for homes priced over $1 million was the only segment that grew year-over-year, now 12% of the market compared to 9% in 2021.

Welcome to Ottawa

Following two years of accelerating demand and steep price climbs, Ottawa’s market continued along the plateau established in the first half of the year. The market has balanced rapidly and total sales volume is the lowest it has been in the last eight years, down by 25 per cent from 2021. However, the $1 million-plus market bucked the trend as the only price segment to see growth in 2022 with the total sales volume up 8.6 per cent year-over-year. Sales over $1 million represented 11.7 per cent of all transactions this year.

As intended, interest rate hikes blunted price escalation. The region was previously attractive to buyers cashing in from more expensive markets such as Toronto and Vancouver. But, as interest rate hikes have affected the value of their current homes, this practice is less lucrative than before. Still, prices are holding as 20,000 to 25,000 new residents move to the region each year. The market is balanced, approaching buyer’s market conditions as inventory piles up with new listings exceeding sales volume.

At year’s end, the average sold price was $1,271,748 in the $1 – 3.99 million range, down eight per cent from the annual high in August.

Residential home sales breakdown

In July, new listings in the $1 – 3.99 million range dropped by 86 per cent for residential class properties and 92 per cent for

condos. While the sales volume in the $1 – 3.99 million range was cut in half, the average sold price was virtually unchanged for residential class properties month-over-month. The average sold price for condos in the $1 – 3.99 million segment hit an annual low of $1,068,667, down 52 per cent from the annual high in January.

August saw new listings nudge up by 24 per cent month-overmonth in the $1 – 3.99 million bracket and remain stable in the $4 million-plus market which is still emerging in Ottawa. While August saw units sold in the $1 – 3.99 million category drop by 24 per cent month-over-month, this was the smallest sales volume decrease for the summer months. The average

“ While current conditions give buyers an edge, some sellers still believe we’re in a bull market. Working with a local real estate specialist is critical to navigate this volatile and changing market that differs from one month to the next. ”

John King, license partner Engel & Völkers Ottawa Central

1409 Blackhorse Court Engel & Völkers Ottawa Central

sale price of residential class properties in the $1 – 3.99 million segment peaked after posting a four per cent bump monthover-month, signaling the early arrival of the fall market. Condos in the $1 – 3.99 million range saw a spike in the average sold price of 94 per cent month-over-month; however, the small sales volume makes this an outlier.

In September, new listings priced between $1 – 3.99 million exploded by 204 per cent month-over-month and by 200 per cent for homes priced over $4 million. While units sold in the $1 – 3.99 million range increased by nine per cent compared to the month prior, this was still down from the first quarter. As inventory piled up, the $1 – 3.99 million range saw the average sold price decrease by five per cent for residential class properties and 26 per cent for condos month-over-month.

In October, new listings of residential class properties in the $1 –3.99 million bracket jumped by 43 per cent month-over-month. With the influx of new inventory in this property class and price range, the average sold price dipped five per cent month-overmonth with units sold staying the same.

In the $1 – 3.99 million range, new listings dipped by 29 per cent and units sold by 31 per cent month-over-month for all property types combined in November. The average sold price in the $1 –3.99 million bracket increased by five per cent for residential class properties and 25 per cent for condos from the previous month.

In December, homes priced between $1 – 3.99 million saw new listings decrease by 60 per cent and units sold by 34 per cent month-over-month for all property types combined. Residential class properties in the $1 – 3.99 million range saw the average sold price decrease by six per cent month-over-month to an annual low of $1,224,208 as units sold dropped by 37 per cent in the same period.

While 23 new listings in the $4 million-plus range hit the market in 2022, a total of four units sold — with two in June and one each in March and July.

Market outlook

Engel & Völkers expects the average price and the overall sales volume to decrease by five per cent from last year. Buyers may lose leverage by mid-March as the sharp impact of the interest rate hike cycle wears off. Once buyers and sellers adjust to the new market, the sales volume and average sold price will see typical gains of about five per cent each year. As prices level off across the region, suburban and semi-rural regions will continue to see price decreases more rapidly than urban and semi-urban neighbourhoods.

$4M

1. Rocky Point and Grandview Road

2. Rideau Forest

3. Rockcliffe Park

$1–3.99M

4. Woodroffe

5. Qualicum

6. Greely

7. Glabar Park

8. Brittania

9. Beachwood Village / Vanier

Toronto

Welcome to Toronto

Toronto’s market has started to level off after experiencing significant growth in recent years. Even as the market normalizes due to interest rate hikes, the impact is muted by insufficient supply. As one of the fastest growing cities in North America, demand for real estate is constant. With an uptick in new construction cancellations, the Greater Toronto Area will feel this lack of new supply in the years to come.

At the end of 2022, the average sold price is $1,533,421 in the $1 – 3.99 million range, down three per cent from the annual high in February and $4,999,637 in the $4 million-plus bracket, down 15 per cent from the peak in May.

Residential home sales breakdown

July was the fifth consecutive month of decreasing average sold prices in the GTA; the average sold price hit an annual low of $1,454,299 in the $1 – 3.99 million segment. However, this is only five per cent down from June despite the highest interest rate hike occurring in July. While the sales volume of homes priced between $1 – 3.99 million dropped by 34 per cent month-over-month, new listings also fell by 36 per cent for all property types combined.

The $4 million-plus range saw the average sold price for residential class properties hit an annual high of $6,199,350 in July. At the same time, the sales volume in the $4 million-plus market hit an annual low of nine, down 84 per cent from the peak recorded in April.

While August saw the smallest month-over-month decrease of units sold in the $1 – 3.99 million category, down by three per cent month-over-month for all property types, condos saw a bump of seven per cent. With new condo listings down by 10 per cent month-over-month, the average sold price rose by five per cent. Simultaneously, residential class homes in the $1 –3.99 million category saw the average sold price drop to an annual low of $1,570,500 with 513 units sold.

While the fall market typically signals an uptick in demand, the sales volume was low compared to spring. In September, units sold in the $1 – 3.99 million range increased by seven per

2022 sales volume of condos priced between $1 – 3.99 million up 71% from 2020, but down by 18% from 2021.

“ The market will continue to normalize, likely through to the third quarter of 2023. As inflation stabilizes and confidence in the real estate market returns, so will buyers. Once they return, market prices will climb as supply is outpaced by demand. ”

Anita Springate-Renaud, license partner Engel & Völkers Toronto Central

cent month-over-month and new listings by 29 per cent. Even with this bump in inventory, demand outpaced supply, pushing average sold prices in the $1 – 3.99 million bracket up by almost four per cent for residential class properties and two per cent for condos month-over-month. Homes priced over $4 million saw new listings explode, increasing by 102 per cent monthover-month across all property types. This influx of inventory in the $4 million-plus range drove prices down, particularly for residential class properties which saw an annual low of $5,077,143 after a 14 per cent drop month-over-month.

From September to October, new listings for all property types dropped 30 per cent in the $4 million-plus range and 10 per cent in the $1 – 3.99 million segment month-over-month. Units sold ticked up by 17 per cent month-over-month for homes priced over $4 million and six per cent for homes priced between $1 – 3.99 million. While the average sold price for residential class properties in the $1 – 3.99 million range saw almost no change in October, condos dipped by four per cent month-over-month.

In November, the average sold price for condos between $1 –3.99 million climbed by seven per cent as inventory tightened, with new listings down 34 per cent from October and 56 per cent from the May high. Even as condo units sold in the $1 –3.99 million bracket hit an annual low after a 10 per cent dip month-over-month, prices crept up due to low supply.

While the sales volume in the $1 – 3.99 million category dropped by 46 per cent across all property types, new listings decreased by 62 per cent to an annual low of 471. As inventory tightened for the second month in a row, the average sold price nudged up by 0.7 per cent for residential class properties and 0.2 per cent for condos to an annual high of $1,479,306 in the $1 – 3.99 million range. While new listings of homes priced over $4 million hit an annual low, it is typical for this market segment to see little activity in December.

Market outlook

The Bank of Canada is nearing the end of its interest rate hike cycle, which has successfully mitigated housing price growth. The success of interest rate hikes renders the impending foreign buyer ban unnecessary as Canadian markets are already going through the process intended by this ban. The ban fails to address the core issue of constrained supply, which will be amplified by the approximately 500,000 new immigrants Canada expects to welcome each year through 2025. A large portion of these new immigrants are expected to settle in the GTA.

$4M +

1. Bridle Path

2. Lawrence Park

3. Forest Hill

$1–3.99M

4. Bloor West

5. Greektown

6. Riverdale

UP-AND-COMING

7. Riverside

8. East End Danforth

9. Oakwood-Vaughan

Vancouver

first half of year.

Welcome to Vancouver

Vancouver’s real estate market has entered a stalemate. Despite the plummeting sales volume and a consistent number of new listings helping to replenish supply, prices are still creeping up. Demand remains largely domestic, with buyers interested in the region for the employment opportunities and amenities it offers. While supply is no longer at an extreme low, it is still inadequate. Many of those who can wait to sell are opting to do so, worried about taking a loss as some buyers feel hesitant to make major financial decisions during global economic uncertainty. Moveup buyers are in a great position with the calmer pace and accumulating inventory. Conditional offers have returned after being off the table for the last few years. As some workplaces return to the hybrid model, areas with proximity to the city, such as Coquitlam, are of interest to homebuyers.

As 2022 came to an end, the market balanced with the average sold price for residential class properties in the $1 –3.99 million segment continuing to trend down from its peak in the first quarter, landing at $1,739,172. The $4 million-plus segment saw the average sold price peak later in the year before settling on $5,260,546.

Residential home sales breakdown

In July, condos and residential class properties in the $4 million-plus market experienced opposite shifts. After trending down since spring, the average sold price for residential class

properties listed over $4 million saw an eight per cent bump month-over-month as new listings decreased by 28 per cent and the sales volume dipped by 41 per cent. Condos priced over $4 million saw the average sold price shrink by 23 per cent, sales volume increase by 40 per cent and new listings plummet by 61 per cent month-over-month. In the $1 – 3.99 million range, the average sold price held, decreasing by only 0.5 per cent for residential class properties and two per cent for condos month-over-month. In the $1 – 3.99 million bracket, the sales volume continued to decrease.

Andrew Carros, chief operating officer Engel & Völkers Vancouver

Sales of condos in $1 – 3.99 million range up 95% from 2021 with 62% occurring in

“ It’s important to make decisions with real-time market conditions in mind. Working with an advisor you trust to protect your interests and making calm, informed decisions is key. In this shifting market, sellers fare well if their home is priced at its true value, versus too low with the intent to start a bidding war. ”

3370 Craigend Road

Engel & Völkers Vancouver

In August, the $4 million-plus segment saw the average sold price climb by 13 per cent for residential class properties and two per cent for condos from July. New listings for all property types priced over $4 million climbed by 17 per cent. Across all property types, units sold in the $4 million-plus segment dropped by 25 per cent month-over-month, with residential class properties in this range seeing an annual low of 17.

September saw the average sold price for residential class properties in the $4 million-plus bracket peak at $7,392,207 as new listings decreased by two per cent and the sales volume doubled from the month prior. At the same time, no sales were recorded for condos priced over $4 million. Residential class properties in the $1 – 3.99 million range saw the average sold price decrease by two per cent from the month prior. The sales volume for homes priced between $1 – 3.99 million was down 67 per cent from the high in March, bucking seasonal fall trends.

In October, units sold across all property types priced between $1 – 3.99 million saw a 17 per cent month-over-month bump as prices remained down from the high points recorded in the spring. Homes priced over $4 million saw sales volume hit an annual low after a 54 per cent drop, the largest month-overmonth decrease last year. New listings in the $4 million-plus segment decreased by 12 per cent month-over-month. In the $1 – 3.99 million category, new listings saw a 21 per cent monthover-month decrease.

December saw the fewest residential class units sold priced between $1 – 3.99 million, hitting 318 after a 27 per cent decrease month-over-month. As new listings for condos priced between $1 – 3.99 million reached an annual low of 236 following a 58 per cent decrease month-over-month, the average sold price ticked up by four per cent due to tightening inventory and numerous new policies set to take effect in January. For example, the homebuyer protection period, which took effect January 3, 2023, enforces a mandatory three-business-day buffer period giving homebuyers time to secure financing or arrange home inspections. The policy includes a rescission or cancellation fee of 0.25 per cent of the purchase price to ensure all parties are taking the transaction seriously.

Market outlook

Engel & Völkers expects a robust spring market as interest rates stabilize, returning activity to a manageable pace. The foreign buyer ban began in January 2023 and will likely have little effect on the resale market as demand is largely local. As previous legislative attempts to drive down prices have failed in Vancouver, the government should consider supporting Canadians entering the housing market with new ownership models such as fractional ownership, shared equity ownership, partnerships and community land trusts.

$4M +

1. West Vancouver

2. Point Grey

3. Shaughnessy

$1–3.99M

4. Mount Pleasant

5. Kitsilano

6. Grandview

UP-AND-COMING

7. Burnaby North

8. Coquitlam

9. Port Moody

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