Although Metro Vancouver’s MLS home sales and prices have been recovering from their recent downturn since last summer, it’s a different story when looking at the luxury sector in isolation, according to a new report by Royal LePage.
The national brokerage issued a forecast February 25, reporting that the median price of a luxury house in Metro Vancouver at the end of January 2020 was $5,394,594, which is 6.7 per cent year-over-year decline. Luxury condos in the region dropped 4.4 per cent to $2,411,773 over the same period, it added.
However, Royal LePage said that recent signs of recovery in the market will eventually trickle up to push up prices in the luxury sector, albeit at a slower pace than the lower end of the market.
The report said, “While luxury real estate in Greater Vancouver is showing year-over-year declines in median prices for both houses and condominiums over the twelve-month period, a significant boost in luxury unit sales since October 2019 is moving the market towards stabilization. From October 1, 2019 to January 31, 2020, the median price of a luxury house in Greater Vancouver decreased 1.3 per cent year-over-year, while the median price of a condominium was relatively flat, posting a 0.2 per cent year-over-year increase.”
Jason Soprovich, a West Vancouver realtor with Royal LePage Sussex, said, “Metro Vancouver’s residential real estate market is shifting towards a balanced market and this trend has been moving upward through the luxury market. There is healthy demand for homes priced between $3 million and $5 million, and this segment is starting to stabilize. It will take more time for the upper-end segment to move into a balanced market, but it is expected.”
The report added that luxury home prices in the region were expected to continue their decline, but with relatively “modest” drops, over the coming year.
Royal LePage expects the median price of a Metro Vancovuer luxury house to fall another two per cent year-over-year to $5,287,000, while the median price of a luxury condo is predicted to slip 1.5 per cent to $2,376,000.
Across Canada, the national report said that the Greater Montreal Area had posted highest appreciation in Canada over the year, for both luxury houses (up 8.5 per cent) and condos (up 8.3 per cent). This was followed by Greater Toronto Area luxury condos, which were seven per cent higher than one year previously.
Royal LePage said of the two metropolitan regions, “Limited inventory and high demand will continue to fuel luxury home price growth, and Royal LePage forecasts continued price appreciation across GMA and GTA luxury markets.”
The report said that Greater Ottawa’s luxury housing market has seen a balanced market for luxury houses (prices up 2.7 per cent) and condos (up 2.2 per cent) “as new-build prices push demand for resale listings,” it added.
Greater Calgary’s luxury home market told a similar story to Metro Vancouver, with prime real estate prices softening, but signs of renewed market activity leading to optimism.
Royal LePage’s report said, “Calgary’s luxury house prices are expected to be relatively flat [over the coming year]. The median price of a luxury house is expected to decrease by 0.5 per cent to $1,941,000 while the median price of luxury condominium is forecast to decrease 3.0 per cent to $860,000.”
Read the full Royal LePage national luxury home forecast here.