Edmonton_2023 Spotlight on Luxury

Luxury real estate sales climb as pent-up demand buoys activity

This report includes "forward-looking statements" within the meaning of the "safe harbour" provisions of the United States Private Securities Litigation Reform Act of 1995. Forward-looking statements may be identified by the use of words such as "believe," "intend," "expect," "estimate," "plan," "outlook," "project," and other similar words and expressions that predict or indicate future events or trends that are not statements of historical matters. These forward-looking statements include statements regarding housing market conditions and the Company's results of operations, performance and growth. Forward-looking statements should not be read as guarantees of future performance or results. Forward-looking statements are based on information available at the time those statements are made and/or management's good faith belief as of that time with respect to future events and are subject to risks and uncertainties that could cause actual performance or results to differ materially from those expressed in or suggested by the forward-looking statements. These risks and uncertainties include (1) the global COVID-19 pandemic, which has impacted the Company and continues to pose significant and widespread risks to the Company’s business, the Company’s ability to successfully close the anticipated reacquisition and to integrate the reacquired regions into its business, (3) changes in the real estate market or interest rates and availability of financing, (4) changes in business and economic activity in general, (5) the Company’s ability to attract and retain quality franchisees, (6) the Company’s franchisees’ ability to recruit and retain real estate agents and mortgage loan originators, (7) changes in laws and regulations, (8) the Company’s ability to enhance, market, and protect the RE/MAX and Motto Mortgage brands, (9) the Company’s ability to implement its technology initiatives, and (10) fluctuations in foreign currency exchange rates, and those risks and uncertainties described in the sections entitled “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in the most recent Annual Report on Form 10-K and Quarterly Reports on Form 10-Q filed with the Securities and Exchange Commission (“SEC”) and similar disclosures in subsequent periodic and current reports filed with the SEC, which are available on the investor relations page of the Company’s website at www.remax.com and on the SEC website at www.sec.gov. Readers are cautioned not to place undue reliance on forward-looking statements, which speak only as of the date on which they are made. Except as required by law, the Company does not intend, and undertakes no duty, to update this information to reflect future events or circumstances.

Edmonton

Market-by-market highlights

Sign-Up For Our Newsletter

Heated home-buying activity is spilling into luxury segments in major Canadian housing markets as supply constraints spark new rounds of competition. Much of the activity in the market can be attributed to pent-up demand, which has been building since mid-2022. Bolstered by lower mortgage rates and attractive housing values, buyers from all walks of life are taking advantage of this moment to secure home ownership. RE/MAX Canada interviews RE/MAX brokers and agents in 15 markets from coast to coast. These are the notable luxury real estate trends taking place in Edmonton.

Tight inventory levels continued to challenge luxury buyers in the Edmonton real estate market first three months of 2023, with high-end sales over $1 million hovering at 40, down significantly from year-ago levels during the same period. Despite pent-up demand and an ongoing influx of buyers from Ontario and British Columbia, listings available for sale have slowed to a trickle, especially at the coveted $1 million to $1.2-million price point. Buyers are squeezed between what they want and what is currently available, and they seldom match up. Close to 260 listings are currently available between $1 million and $14 million. Values, however, are holding up fairly well, with no big dip, given that the cost to build is so much higher. Move-up buyers, usually in their late 30s to late 40s with teenage children, represent the lion’s share of high-end purchasers. Most are seeking large homes and substantial lot sizes in mature neighbourhoods, a trend that ticked up during the pandemic. Existing stock, including spec properties, is most sought-after, with fewer buyers choosing to build or buy newer homes from plans due to the uncertainty of spiralling construction costs. The strongest demand is found in west end neighbourhoods such as Crestwood and Laurier overlooking the river valley, while Windsor Park and Belgravia are popular destinations sough of the river by the University of Alberta. Upper-end buyers seeking larger lots typically look to Edmonton’s suburban communities such as Windemere with its estate properties on the ravine or in Summerside, where homes backing onto the lake are coveted. Downsizing and lateral moves are also occurring, albeit to a lesser extent, with homeowners in older, established neighbourhoods trading large, tired homes for smaller and newer infill properties within similar areas. The foreign buyer ban has had an unintended consequence in the Edmonton area as corporate transfers and professional sports players get caught up in the net. With no exemptions in sight, many have chosen to rent. As the spring market takes shape, luxury REALTORS® are fielding more calls from both interested buyers and much-needed sellers but some sort of catalyst is necessary to really kick-start the housing market. A decline in interest rates would be the ideal impetus, providing a boost to consumer confidence and mindset. Until then, we expect activity to be somewhat tempered in the months ahead, with the luxury market kicking into high gear by the fall.

Click each city for local market insights.

Vancouver, BC

Buyers at the top end of the market are looking to take advantage of somewhat softer housing values, but many sellers are holding firm on price, even willing to pay vacancy taxes while waiting for market conditions to improve. While move-up activity has been occurring as buyers take advantage of discounts at the top end of the market, there has been an uptick in sellers downsizing to smaller pieds-a-terre in the core or selling secondary properties to avoid tax implications. Based on the late first quarter burst of homebuying activity, sales in the second quarter of 2023 are expected to ramp up in tandem with the traditional spring market. Buyers who have been sitting on the fence are likely to make their moves in the coming months.

Calgary, AB

Market conditions remain challenging, despite a welcome reprieve from last year’s frenzied pace. Buyers are exercising caution in the market, and although multiple offers continue to occur, the winning bid is rarely more than $20,000 to $30,000 over asking, unlike some of the frothier bids seen just one year ago. Values at the top end of the market are ahead of Q1 2022 as a result, with average price up more than $30,000 in the first quarter of 2023 ($1,441,687 vs. $1,409,253).

edmonton, AB

Despite building pent-up demand and an ongoing influx of buyers from Ontario and British Columbia, listings available for sale have slowed to a trickle, especially at the coveted $1 million–$1.2 million price point. Existing stock, including spec properties, is most sought-after, with fewer buyers choosing to build or buy newer homes from plans due to the uncertainty of spiralling construction costs. As the spring market takes shape, luxury REALTORS® are fielding more calls from both interested buyers and much-needed sellers but some sort of catalyst is necessary to really kick-start the housing market.

saskatoon, sk

Sales of luxury properties over $750,000 are on the upswing in Saskatoon, with homebuying activity in the first quarter of the year expected to exceed levels reported during the same period in 2022. The supply of homes available for sale continues to tighten across the board. Strong economic fundamentals continue to underpin Saskatchewan’s economy, providing an ideal backdrop for a robust housing market

winnipeg, mb

The pause on rate hikes has provided some slight stimulus in the market, prompting those who were on the fence or waiting for the market to bottom out to re-enter. Sales at the top end of the market appear to be better insulated from market pressures, with uber-luxe sales over the $1.5 million price point relatively unaffected. While the move-up market has been subdued because of carrying costs, there has been a flurry of downsizing activity in the top end of the market as property owners look to simplify their lifestyles.

london, on

Balanced market conditions exist at present, but rising sales are depleting the limited supply of homes available for sale in London. New construction has faltered over the $1 million price point as the gap between resale and homebuilders’ pricing increases. Luxury sales are expected to gain traction with the advent of the traditional spring market, but high-end buyers will likely remain somewhat cautious with the threat of further interest rate hikes ever present.

Hamilton & Burlington, on

February sales showed increased strength at higher price points, with affluent buyers typically seeking newer, high-end product or older homes that have been completely gutted. Inventory levels are up over last year in the luxury segment but remain in balanced market territory. The uber-luxe segment of the market, priced between $4 million and $5 million, has performed relatively well as it is somewhat insulated from the overall market stressors.

Greater Toronto Area, on

Hungry buyers returned to the market, expecting bargains and selection, but finding neither. Limited inventory has placed upward pressure on values and prompted a new round of competitive offers on well-priced homes in desirable areas. Buyers are feeling frustrated with the lack of selection available, particularly in the $3 million to $5 million prince range. Midtown communities such as Summerhill, Forest Hill, Annex, South Hill/Casa Loma, Bedford Park, and Lytton Park are most popular with this segment of the market.

Ottawa, on

Homebuying activity at the entry-level to luxury – between $1.25 million and $1.5 million – is particularly brisk, with more than half of all luxury sales occurring at that price point. Momentum is strong heading into the spring market, a direct contrast to Q4 2022, when uncertainties plagued the housing market. The stage is set for an active first quarter, with demand for luxury homes expected to gain traction in the coming months.

Montreal, QC

An ample supply of high-end, single-detached homes and condominiums is currently listed for sale across the city. Uber-luxe buyers have been active in the market recently, driving sales at $5 million plus, including a recent sale in Westmount for almost $8 million and Ville-Marie (Westmount adjacent) for $5.6 million. As home-buying momentum gains traction in the Island of Montreal heading into the busiest months of the year for the residential market, spillover is expected in the luxury segment.

Halifax, NS

Pent-up demand is building, yet there are numerous buyers on the fence, despite the pause in interest rate increases. Inventory remains sparse at the top end of the market, with limited product available in high-demand areas such as the Peninsula of Halifax, along with Bedford and the Fall River areas. Luxury sales in the first quarter of 2023 were slightly ahead of fourth quarter 2022 levels, but it’s too soon to tell if the spring market will blossom.

Kelowna, BC

REALTORS® are reporting renewed interest at the top end of the market in recent weeks, which should translate into more sales in the second and third quarters of 2023. Just under 50 homes traded hands over the first three months of the year as concerns over stock performance amidst a flurry of bank failures have shaken the market. As Canada’s fastest-growing metropolitan area, according to Statistics Canada, the increase in out-of-town and out-of-province buyers should serve to further bolster homebuying activity in the months ahead as temperatures and sales heat up.

Fraser Valley, BC

Lower-end price points are already experiencing multiple offers in the double-digits, with homes selling well in excess of listing prices in recent weeks. Buyers have adjusted their expectations as sellers hold firm on asking price, while the sales-to-listings ratio signals a strong seller’s market. Supply remains a crucial component in the housing equation; without an uptick in new listings, values will likely continue to climb.

Moncton, Nb

Moncton was one of the few Canadian markets that bucked the downward trend in luxury sales in the first quarter of 2023, posting a 55-per-cent increase in sales over $700,000. The city’s luxury space has experienced solid growth since the onset of the pandemic. A shortage of listings exists across every price point but are particularly scarce at the $700,000 threshold.

St. John's, NL

Sellers are hesitant to list their properties due to the dearth of available listings, and builders are reluctant to put a shovel in the ground without a firm commitment given today’s higher-interest-rate environment. Representing about five per cent of total sales, the luxury segment has taken off in recent years thanks to the province’s strong economic base which remains propped up by the province’s natural resources. The Bank of Canada announcement regarding the temporary pause in interest rates has been welcome news to buyers in the St. John’s area. While it has yet to translate into greater sales at the top end of the market, it has provided some stability for the impending spring market.

About this report

About the RE/MAX Network

As one of the leading global real estate franchisors, RE/MAX, LLC is a subsidiary of RE/MAX Holdings (NYSE: RMAX) with more than 140,000 agents in almost 9,000 offices with a presence in more than 110 countries and territories. RE/MAX Canada refers to RE/MAX of Western Canada (1998), LLC, RE/MAX Ontario-Atlantic Canada, Inc., and RE/MAX Promotions, Inc., each of which are affiliates of RE/MAX, LLC. Nobody in the world sells more real estate than RE/MAX, as measured by residential transaction sides. RE/MAX was founded in 1973 by Dave and Gail Liniger, with an innovative, entrepreneurial culture affording its agents and franchisees the flexibility to operate their businesses with great independence. RE/MAX agents have lived, worked and served in their local communities for decades, raising millions of dollars every year for Children’s Miracle Network Hospitals® and other charities. To learn more about RE/MAX, to search home listings or find an agent in your community, please visit remax.ca. For the latest news from RE/MAX Canada, please visit blog.remax.ca.

Search Listings

Find a RE/MAX Agent

2023 Spotlight on Luxury report