The dramatic rise is in sharp contrast to the first quarter of 2023, when Montreal saw a 14 per cent drop in sales of $1-million-plus homes.
Montreal’s real estate market defied expectations in the first three months of 2024, recording a “surprising and unseasonably early uptick” in sales of properties that cost at least $1 million.
In the first quarter, 378 residences priced at $1 million or more were sold in and around Montreal, according to a Sotheby’s International Realty Canada report on the luxury home market, published Wednesday.
That’s a 53 per cent jump compared with the same period last year.
The vast majority of 2024 luxury-home sales — 318 — were in the $1-million to $2-million range.
“That was obviously a huge, huge area of activity,” Don Kottick, chief executive of the real estate company, said in an interview.
The dramatic rise is in sharp contrast to the first quarter of 2023, when Montreal saw a 14 per cent drop in sales of $1-million-plus homes.
Most 2024 sales involve detached single-family homes, but attached houses and condominiums also increased.
High immigration fuelled some of the demand, Kottick said.
So did pent-up demand.
“A lot of people have been sitting on the sidelines, waiting for an indication that (interest) rates are not going to keep going up,” he said.
“I think many people said, ‘OK, rates are anticipated to come down mid-year,’ and they may have viewed this as a window of opportunity before all the buyers rush back in.”
Sales were stable in the $4-million-plus market. Eight homes were sold in this category, the same as in the first quarter of 2023. No “ultra-luxury” sales (over $10 million) were reported, as in the same period last year.
Kottick said he expects the strong real estate market to continue, especially if the Bank of Canada cuts interest rates in the coming months.
“The sweet spot is really in the $1-million to $2-million range,” he said. “I think we’re going to see that is an area that will remain strong going forward.”
In its report, Sotheby’s said: “Despite a steady inflow of property listings inventory, the Montreal (region) is forecast to grow by 2.5 per cent, attracting skilled workers and families with a need for housing.
“With the region’s economic prospects stable, sales activity across Montreal’s conventional and luxury real-estate market is expected to see steady gains in the months ahead.”
Kottick said last week’s federal budget may affect the real estate market.
People with capital gains of more than $250,000 will be taxed on 67 per cent of the gain, up from the current 50 per cent rate. The change takes effect on June 25.
Principal residences will continue to be exempt from capital gains taxes, meaning they can be sold tax-free.
But the new rate will apply when selling second homes, cottages and investment properties, Kottick noted.
“In rural areas, the cottage markets, the cabin markets, for anybody who was thinking about selling or has investment properties, they’ll take a pause and think about that,” he said.
“I think this will make people just sit and wait things out, perhaps anticipating a change in government and (a) retraction of the changes.”