As Canada’s housing market continued to wrestle with the challenges of elevated mortgage rates, uneven economic performance and intense geopolitical turbulence, reviving luxury single family home sales in the third quarter of the year revealed the relative resilience and adaptability of luxury real estate buyers, as well as Canadians’ unwavering desire to attain home ownership. Luxury freehold home sales in Canada’s largest residential real estate markets renewed in the third quarter of 2023, even as activity in the luxury condo market tempered, a reflection of changing housing considerations, consumer preferences and financial strategies in light of rising housing prices and carrying costs.

Over the summer months, Canadian luxury real estate buyers quietly overcame the challenges of higher mortgage rates, elevated home prices, uncertainty in the macro environment and ever-changing market conditions to fulfill their aspirations of housing ownership and mobility. The return of buyers and investors from the sidelines led to a surprising renewal of luxury sales activity across the country’s largest metropolitan areas, and this was most prominent in the market for luxury single family homes. In fact, across virtually every major metropolitan market, we saw annual percentage gains in single family home sales outpace that of luxury condos in the third quarter of 2023. Across every generation of homebuyer, the allure of single family home ownership is enduring. Given the elevated prices and rising carrying costs of luxury condos, prospective buyers are now reassessing the relative benefits of freehold home ownership. In a market where buyers and investors are increasingly empowered to negotiate and be selective in their property selection, sellers will be increasingly compelled to make compromises to enable a sale. In the near-term, we expect this pressure to be heightened in the luxury condo market.

Record-setting population gains in Canada’s largest metropolitan areas will continue to be pivotal in stabilizing demand for conventional and luxury housing in the short term, while luxury real estate home buyers are revealing their resilience and adaptability in an increasingly challenging market. As the epicentre of Canada’s economy and its most populated metropolitan area, Toronto will continue to hold steady as the nation’s leading luxury market. Despite intensifying geopolitical turbulence, local housing demand and supply is anticipated to prevail as the primary influences on market dynamics this fall.

Market Highlights for Toronto

Across the country’s largest luxury real estate market, Toronto’s residential real estate sales over $4 million (condos and freehold homes) were up 32% year-over-year between July 1– August 31 overall. While freehold home sales over $4 million increased 37% year-over-year, $4 million-plus condo sales retreated 25% from last summer’s levels. Overall, Toronto residential sales over $1 million were up 10% year-over-year over the summer months. Initial fall activity foreshadows a steady market ahead, as sales over $4 million in Toronto saw an uptick of 3% year-over-year between September 1–30. During this time, $4 million-plus freehold home sales saw an annual 25% gain while condo sales over $4 million fell to one transaction from five sales in September 2022.  Overall residential sales over $1 million fell a marginal 4% short of September 2022 sales.