Multiple factors have exerted a strong downward pressure upon luxury home sales in the country’s most in-demand markets, Sotheby’s International Realty Canada said in its report in January.
The study showed that a significant slowdown in luxury property transactions transpired in Calgary, Toronto, and Vancouver throughout 2018, mainly because of supply-side deficiencies and weaker purchasing power stemming from the economic impact of sliding oil prices.
Calgary’s sales activity involving homes valued at $1 million and above shrunk by 10% annually in 2018, with oil weakness cited as the main factor. In fact, only one property worth more than $4 million was sold in the city last year.
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Meanwhile, Toronto sales of homes worth $1 million and above fell by 31%, and transactions for homes priced higher than $4 million shrunk by 40%. Vancouver’s year-over-year activity declines in these price brackets were at 26% and 49%, respectively.
Signs of these problems were already apparent as early as mid-2018, and the numbers indicate that these trends might not be stopping any time soon.
“The collision of rising mortgage rates, stricter lending guidelines and cascading governmental policies and taxes have impacted the performance of several top-tier Canadian markets,” Sotheby’s International Realty Canada president and CEO Brad Henderson warned back in July.