Outlook for luxury real estate market in 2024

Article content

Heading into 2024, interest rates were at the forefront of real-estate buyers’, sellers’ and investors’ minds. What can we expect from the high-end real-estate market this coming year?

We asked luxury real estate agents in Vancouver, Calgary, the Greater Toronto Area and Montreal what trends they have seen develop among their UHNW clientele, and what buyers want this coming year.

They discussed ideas ranging from “frictionless living” and maximalist design, to the types of properties wealthy buyers are looking for in different cities, why urban waterfront properties are in demand and what strategy buyers are using to respond to the expected interest-rate environment.

Cailey Heaps

President and CEO, Heaps Estrin Real Estate Team, Toronto

“Over the past two years, Toronto faced a significant inventory shortage and high buyer demand driven by historically low interest rates. This left many potential buyers waiting.

Recently, with increasing interest rates, diminishing consumer confidence in the current housing market and the general economy, and new and proposed property-related taxes (including the impending Toronto land transfer tax increase and the tabling of an increase in property tax), we’ve seen more listings and properties staying longer on the market, with fewer multiple offer situations.

[In] 2024, experts predict a more balanced market. Minimal interest-rate hikes are anticipated for the near future, and once the general outlook stabilizes, we should expect to see a more “normal” market for buyers and sellers alike. The Toronto market may balance out, but the fundamentals driving the market historically, such as lack of inventory and high immigration rates, will help bring strength back to the market.

[In terms of] what buyers want now, I recently discussed the idea of ‘frictionless’ living. Luxury buyers want a lifestyle that allows ease of movement and access to lifestyle features that enhance their daily lives, such as private clubs, strong school, green space, commerce and transit.

Of course, there is also demand for strong design and there has been a movement away from ultra-contemporary to a softer contemporary, as well as maximalist design [showcasing and mixing patterns, colour and accessories].”

George Niblock

Team Lead, Real Estate Agent, Niblock Real Estate, Oakville, Ont.

“Oakville [west of Toronto] is known for its historic downtown core and its spectacular waterfront on Lake Ontario. Our ultra-high-net-worth [UHNW] buyers know that Oakville’s prestigious lakefront is the most sought-after in the [Greater Toronto Area] because, along with a finite number of waterfront properties, south Oakville is a very safe community and offers access to some of the highest-rated schools, both private and public.

Waterfront in Oakville is seen as a solid investment due to scarcity and prestige. We have seen these properties increase significantly in value through the pandemic as UHNW buyers seek properties where they can feel like they are on vacation while enjoying the comfort of their own homes.

Waterfront estate properties essentially operate in their own market. They are a rare opportunity that sometimes only comes around once in a lifetime. These assets are typically less impacted by ebbs and flows of the market as seen with recent interest rate hikes.

We expect this trend to continue well into the future as the population in the GTA continues to expand and waterfront properties become an even more rarified commodity.”

Adil Dinani

Principal, Dinani Group, Royal Lepage West, Vancouver

“We’ve been fortunate for the strong resiliency in our market. With 10 rate increases in the past 18 months a more cautious sentiment has taken over the market, with our clients predominately favouring a more patient strategy.

With inflation behaving more like a yo-yo, most clients are keenly watching every move the Bank [of Canada] is making and waiting to see if rates will increase again this fall.

Most clients are looking at this time of uncertainty as a window in the market to act on compelling opportunities. There is clearly a flight to quality assets and most of our clients are playing the long game and less concerned with short-term gyrations in the market.

Once interest rates reverse course, most clients are feeling optimistic that prices will begin to move higher.

The longer-term outlook for real estate in the region is very positive; additionally, the Canadian Immigration department has set a target of admitting 465,000 permanent residents this year, 485,000 in 2024 and 500,000 in 2025. In June for the first time, Canada’s population officially surpassed 40 million – when you combine both rising population and slowing housing starts, this will likely amplify our existing housing crisis.”

Alex Hripko

Managing Partner, John Hripko Real Estate Team, Calgary

“In Calgary, the UHNW clientele are either doing one of two things.

They are buying expensive pre-builds between $400,000 to $1.2 million as investments to rent out through our sister company, Citysearch Rental Network.

The other thing they are doing is that they are buying lots or a property with a home to demolish in the community they want to move to and building their dream home – not many of them are buying resale; the majority are buying lots and building.

We are seeing a huge number of buyers moving from Ontario and British Columbia to Calgary for the affordable housing market and buying homes for good value compared to what they can buy elsewhere.

Overall, UHNW clients want properties with downtown views or mountain views – really, they are buying location and doing the full build … or may choose to do a complete reno if they like the structure and layout of the existing home.”

Christina Miller

Founder, Christina Miller Real Estate Group, Westmount, Queb.

“Over the past year, many UHNW buyers in Montreal, unless they are really desperate for a new place to live, have become more selective about their investment choices.

With the rise in interest rates, this financially sophisticated group is being especially careful not to overpay for a property. They are making offers but are not ready to pay any price just to have it.

I have had clients simply walk away from a purchase if negotiations stall or because the buying environment doesn’t feel right to them. What I am seeing is that many of the UHNW buyers want to negotiate hard. Otherwise, they will opt to sit on the sidelines for a little while to see what 2024 will bring.

Their capital is safely providing a solid return at the bank for the first time in many years, so I expect them to continue being mindful through 2024 [and] look for value opportunities and not to overspend.”

Responses have been lightly edited for clarity and length.

Please visit here to see information about our standards of journalistic excellence.