After a calm first quarter for luxury real estate in Vancouver, demand is strengthening as buyers who have been waiting on the sidelines start to move into the market, according to a new report from Sotheby’s International Realty Canada.
Consumer demand is building with real estate agents reporting higher numbers of showings for luxury listings, said company CEO and president Don Kottick.
“We've got a lot of buyers that have been pre-qualified and the general consensus is that a lot of buyers have been waiting for the spring market to really arrive,” he said. “We are starting to see more traffic coming through our listings, we're starting to see more buyers interact with their Realtor. So, they're coming off the sidelines.”
The timing of buyers returning to the market depends on whether long-awaited housing stock comes through, according to the April 19 report from Sotheby’s. Vancouver’s housing supply, for both luxury and conventional housing, is facing a deficit that is not enough to meet the intensifying demand. Sellers are also waiting until new listings are introduced before putting their home on the market, said Kottick.
“Across all the markets, and Vancouver included, low inventory is really the consistent message. Whether it's Victoria, Vancouver, Toronto, Halifax, low inventory is definitely an issue,” he said.
Luxury residential sales over $4 million, across all housing types, were down 53 per cent in the first quarter of this year compared to 2022. Fifty-four properties over that price point were sold, with four of them being above $10 million between January 2023 and March 2023.
The condominium market in Vancouver saw muted activity with two sales over $4 million in the first quarter of this year. This represents an 88 per cent decline from the first quarter of 2022. There was one condominium sold for more than $10 million in the first quarter of this year, compared to none during the same period last year.
“Condominiums are always a destination for people when they can't find single-family homes, so we are starting to see more activity in the luxury condo market,” said Kottick.
Single-family home sales over $4 million also remained muted in the first quarter, falling 47 per cent to 52 homes sold compared with the same period in 2022. Sales of homes under $1 million also fell by 47 per cent to 343 sales in the first three months of 2023. During this period, there were three single-family homes sold for over $10 million, compared to five in 2022.
Detached homes coming in around $2.5 million are getting the most attention, said Kottick.
“We're not seeing the scenario where buyers are overpaying like they were a couple of years ago. They understand what they're willing to bid but they're not going to overbid,” he said. “If they price right and they are in the market sweet spot of that particular property, it potentially will go into bidding if it’s in a high-interest, high-demand area.”