While expectations are that the Canadian real estate market will pick up in 2025, there’s one segment of the market that already saw a 40.5 per cent year-over-year growth in the most recent quarter.
According to Re/Max Canada, the Greater Toronto Area’s (GTA) luxury market – meaning homes valued over $3 million – saw activity pick up towards the end of last year. In the fourth quarter of 2024, 364 homes priced between $3 million and $5 million were sold, marking a 40.5 per cent increase in sales compared to the year before. Over the whole year, home sales in that price range increased 3.9 per cent compared to 2023.
In a news release, Re/Max Canada president Christopher Alexander says the Bank of Canada’s recent rate cuts have helped spark demand for high-end properties in the GTA. While there was pent-up demand, softer prices and higher inventory levels through much of 2024, Re/Max Canada notes that the central bank’s back-to-back 50 basis point cuts were “the primary catalyst” behind the stronger buyer enthusiasm seen at the end of the year.
“We’ve been expecting a surge in top-tier sales activity as the economic climate and corresponding pause in buying intentions prompted a build-up in pent-up demand. The fourth quarter did not disappoint,” Alexander said.
Pricier luxury homes also saw sales pick up in the fourth quarter. Sales of homes priced between $5 million and $7.5 million rose 58.5 per cent annually, with sales up 21.1 per cent in 2024 compared to 2023. Sales of homes priced between $7.5 million and $10 million climbed 41.2 per cent year-over-year in the fourth quarter, with sales up 18 per cent in 2024 compared to the previous year.
The increase in sales comes after the Bank of Canada cut its benchmark interest rate by 175 basis points since June, including two jumbo 50 basis point cuts in October and December. The central bank’s policy rate now sits at 3.25 per cent.
“The uptick in home-buying activity sets the stage for a strong luxury market in 2025,” Alexander said.
“After several years of softer sales at higher price points, affluent buyers have the confidence to move forward once again. Supply has been a considerable factor hampering strong buyer intentions and we expect that to continue. While we do expect to see more listings come on stream, they’re being offset by the increase in buyers moving off the sidelines.”
As activity in the luxury market picks up, Re/Max expects that the broader housing market will also be more active in 2025. The real estate firm predicts the national average residential price will increase five per cent over the course of this year, as optimism about the housing market grows among Canadians.