Well-heeled buyers may want to consider snapping up luxury condominiums in Vancouver, where growing inventory, lower prices and falling interest rates have created an investment window, says Sotheby’s International Realty Canada.
A buyer’s market emerged for luxury Vancouver condos in 2024 primarily due to accumulation of available inventory and downward pressure on prices, Sotheby’s said in its Jan. 15 report about luxury real estate trends in Canada.
As a result, a higher number of posh units traded hands in Vancouver last year compared to 2023. Condo sales over $4 million increased 26 per cent year-over-year to 29 sales, the brokerage said.
Meanwhile, the city saw a 15-per-cent decline in detached home sales above $4 million, to 264 sales. The $4-million mark is the threshold for “luxury” used by Sotheby’s for Vancouver’s real estate market.
Sotheby’s expects these market dynamics to persist in the coming months, creating investment opportunities for wealthy buyers who prefer urban living or can’t find detached-home listings suitable for their needs and wants.
“The current [buyer’s] market spans all housing types with variation by location and property condition,” the report said of Vancouver.
“However, Sotheby’s International Realty Canada experts pinpoint the pre-sale and resale luxury condominium markets as presenting favourable investment opportunities given lingering oversupply, softening prices and falling interest rates.”
Still, detached homes accounted for the vast majority of luxury transactions in 2024, representing 89 per cent of all residential transactions in Vancouver over $4 million.
Although demand for single-family homes “continued to dominate the luxury market in Vancouver” in 2024, Sotheby’s said some prospective buyers held off transacting due to cloudy conditions.
“Sales activity remained relatively slack throughout the year as buyers, particularly move-up buyers in the entry-level top-tier market, remained cautious, prioritizing affordability amidst economic uncertainty and elevated mortgage rates,” said Wednesday’s report.
Don Kottick, president and CEO of Sotheby’s International Realty Canada, said Vancouver’s luxury segment as a whole faced numerous challenges in 2024.
“If we just look at the headwinds that were there in 2024, we had political turmoil, we had the economic uncertainty, we had the rising cost of living, increased housing taxes, the stringent regulatory restrictions on building, and then coupled with this, we had some rising inventory levels,” he told BIV.
Despite these lingering obstacles, Kottick said a stabilized luxury market may be on the horizon.
“We still have pent-up buyer demand, there’s still the buyers that are looking to buy, and I think in terms of Vancouver, we’re kind of envisioning more of a stabilized market going into 2025. A lot of these key drivers – the pent-up buyer demand, the population growth, the interest rates – will hopefully create a stronger market in 2025.”
In the meantime, the Sotheby’s boss said buyers of top-tier condos may have many options to choose from at favourable price points.
“The buying opportunities that are available, especially in the luxury-condo space, are going to play into a good recovery for the Vancouver market in 2025,” Kottick said.
