Luxury real estate in Vancouver has not been immune to the ups and downs hitting the conventional market in 2023.
The top-tier market started the year with a period of uncertainty, ultimately leading up to a “striking” increase in activity during the spring, according to a new report by Sotheby’s International Realty Canada.
“In April, it really started to pick up and then we found the May numbers were in line with May of 2021, back during the really peak year,” said Don Kottick, president and CEO of Sotheby’s Canada in an interview.
“We really saw some big sales, specifically in the Vancouver market. We're talking the 10 million [dollar]-plus range, where we saw some activity, which was really quite interesting.”
In the first half of 2023, residential sales over $10 million increased by 38 per cent year-over-year with 11 properties sold, according to the July 19 report.
Ten of these properties are single family homes, representing a 25 per cent increase in sales for detached homes in this price range.
Vancouver’s luxury single-family home market saw the most “pronounced improvements” for sales activity and consumer sentiment throughout 2023, said the report.
“Because we've had this chronic shortage of detached homes in Vancouver, whenever a detached home comes on the market it's obviously much sought after,” said Kottick, adding detached homes are expected to sell regardless of price.
During the first half of 2023, there were 174 luxury residential real estate sales over $4 million for all property types, a decrease of 18 per cent compared with the first half of 2022.
One of the main factors influencing the luxury market is a lack of supply. Top-tier housing availability is described as “chronically low” by Kottick. The impact is seen in rising prices and unbalanced conditions as demand outpaces what sellers are willing to offer.
“The spring market presented a conundrum for sellers, especially for the majority who wanted to level up or downsize. Where sellers were confident they could sell their home quickly, they did not have the same belief they would find a suitable replacement,” said a mid-year report on the luxury market from Engel and Völkers, released June 17.
There were 161 single family homes sold for over $4 million in the first two quarters of 2023, a 12 per cent decrease from the first half of 2022, according to the Sotheby’s report.
In the condominium market, there were 11 sales in the $4 million-plus price range, a decrease of 58 per cent for the first half of the year. There was one luxury condo sale over $10 million during the first half of the year.
There were two attached homes sold for over $4 million, down from three homes in the first half of 2022.
The report highlights that low supply is dampening sales for this luxury property type.
Engel and Völkers identified South Surrey, Coquitlam and Burnaby as “up and coming” areas to watch for top tier real estate.
For properties over $4 million, the brokerage highlights North Vancouver’s Edgemont neighbourhood, Vancouver’s Point Grey neighbourhood and West Vancouver as areas to pay attention to.