Top-Tier Real Estate: Spring 2023 State of Luxury Report*

Top-Tier Real Estate: Spring 2023 State of Luxury Report*

Canada’s luxury real estate market saw muted sales activity in the first quarter of 2023, as a shortage of housing supply across every spectrum of the market compelled real estate sellers and buyers to delay market engagement to the second quarter. The country’s major metropolitan areas are primed to see a resurgence of newly pre-qualified and highly motivated home buyers across the luxury and conventional markets this spring, as those who paused their activity in 2022 renew their search, albeit with an empowered mindset that will deter significant price escalation. Despite buoyant consumer confidence and a level of demand that would typically prime the market for healthy activity, a deficit of property listings is expected to place a ceiling on potential spring sales, hampering the housing needs and aspirations of Canadians.

“There has been an immense build-up of demand for housing mobility across Canada’s conventional and luxury real estate market over the past few years, and confidence in the short- and long-term performance of the country’s major metropolitan real estate markets has been unwavering. A significant cohort of prospective home buyers and sellers who were reluctant to make a move in 2022 have now adjusted their expectations to new market norms, and are now pre-qualified, highly motivated and anxious to find a home that meets their needs and lifestyle,” says Don Kottick, President and CEO of Sotheby’s International Realty Canada. “The greatest challenge that they are facing is the sheer lack of housing supply across every price point and housing type. This shortage is placing a chokehold on real estate markets that would otherwise be primed for healthy activity and will mean that properties priced appropriately for the market will see qualified interest and uptake in the coming months.”

According to Kottick, prices have stabilized across Canada’s luxury and conventional real estate market despite the build-up of consumer demand. In light of elevated interest rates and carrying costs, prospective buyers and investors are discerning, strategic and unwilling to bid up properties beyond current market values.

Market Highlights


According to Sotheby’s International Realty Canada’s Top-Tier Real Estate: Spring 2023 State of Luxury Report, a shortage of luxury housing supply in the City of Toronto deflated the aspirations of potential home purchasers, and depressed total luxury sales volume across the Greater Toronto Area in the first quarter of 2023. As a result, GTA luxury residential real estate sales over $4 million (condominiums, attached and single-family homes) between January 1 – March 31 were down 64% year-over-year from the first quarter of 2022. During this time, one property sold over $10 million on MLS, compared to eight ultra-luxury residences sold above this price point in the same period last year. Overall, $1 million-plus residential sales were down 57% year-over-year in the GTA, foreshadowing a competitive market for appropriately priced and well-appointed luxury properties this spring.


As luxury property listings gradually trickled into the Vancouver market in the first quarter of 2023, prospective home buyers continued to await fresh inventory in the spring. As a result, luxury residential sales over $4 million pulled back 53% year-over-year. Four properties sold over $10 million on MLS compared to five sold in the first quarter of last year. Despite intensifying demand for housing mobility, residential sales volume over $1 million contracted 51% year-over-year overall during this time, a consequence of the city’s pervasive shortage of housing across the luxury and conventional market.


Montreal’s luxury residential real estate market, which had tapered to more balanced conditions by the end of 2022, saw sales volume over $4 million declining 33% year-over-year in the first quarter of 2023 in a market that saw moderating prices, an increase in offers submitted with conditions, while also enduring competition for limited inventory in the city’s most prestigious neighbourhoods. Overall, Montreal residential real estate sales over $1 million between January 1– March 31 were down 43% year-over-year.


Dynamic economic growth, positive consumer sentiment and record in-migration into the Calgary metropolitan area continued to fuel activity in the city’s conventional and luxury real estate market in the first quarter of 2023. Although residential sales over $1 million pulled back by 36% year-over-year while the $4 million-plus market remained quiet, $1 million-plus sales volume was a significant 223% higher than in the pre-pandemic first quarter of 2020 and well-above the city’s 10-year average for luxury sales. In stark comparison to the muted sales activity in inventory-starved Toronto and Vancouver, Calgary luxury sales were facilitated by the city’s comparatively favourable ratio of housing supply in relation to demand.

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The information contained in this report references survey results, plus market data from MLS boards across Canada. Sotheby’s International Realty Canada cautions that MLS market data can be useful in establishing trends over time but does not indicate actual prices in widely divergent neighbourhoods or account for price differentials within local markets. This report is published for general information only and not to be relied upon in any way. Although high standards have been used in the preparation of the information and analysis presented in this report, no responsibility or liability whatsoever can be accepted by Sotheby’s International Realty Canada, Sotheby’s International Realty Affiliates or Mustel Group for any loss or damage resulting from any use of, reliance on, or reference to the contents of this document.

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