Sellers of luxury properties in Metro Vancouver are in no hurry to sell, resulting in fewer sales transactions as they wait for prospective buyers to meet their desired prices.
Sales of luxury properties decreased 38.8 per cent in the first eight months of 2024 compared to the same period in 2023, while prices fell just 1.8 per cent, according to the 2024 Royal LePage Carriage Trade Luxury Market Report released on Thursday.
“Buyers are … waiting for that perfect property and are hopeful that sellers will reduce their expectations, but we just continue to see that sellers are holding strong and not really willing to move on their price,” said Jesse Dean Cook, a sales representative with Royal LePage Sussex.
There are few distressed sellers in this property segment, and buyers are waiting to time the bottom of interest rates, resulting in fewer deals for properties like waterfront mansions in West Vancouver, opulent estates in Whistler and downtown penthouses with multiple floors and 360-degree views.
Cook said these types of properties are relatively scarce, and their current owners are often mortgage-free and very wealthy, resulting in price inelasticity.
“A lot of these [sellers] don’t have mortgages, they are incredibly wealthy and have properties and investments all around the world,” he said. “A lot of buyers are hopeful to find distressed sellers, but we’re not seeing a lot of that in this upper luxury segment at the moment.”
Buyers, meanwhile, tend to be successful business owners who have sold their companies and “are looking for that 20-year property,” said Cook. As a result of the federal foreign buyer prohibition in effect since 2023, virtually all buyers are now local, with a handful from Alberta or back east.
While the foreign-buyer ban has moderated demand, recent interest-rate movements have had a modest impact since many buyers do not necessarily require financing, although every reduction can still incentivize them to close a deal.
“For buyers in the luxury market, to get potentially to where they need to get to, if rates fall a bit more then it’s more beneficial for them to enter that segment,” said Cook. “They are pushing to try and meet that sales threshold and every quarter-point does help them.”
The Royal LePage report defines luxury properties in Vancouver as those with prices of at least $5.5 million. Properties that have sold over this threshold in Vancouver this year had a median price of $6,975,000 with an average of 5.2 bedrooms and six bathrooms.
Cook expects prices to remain firm for the next three to six months, though 2025 may see a robust spring market as interest rates continue their expected downward trajectory.
For now, bargains are few and far between, whether for lakefront properties in the Okanagan, gated mansions in Shaughnessy or view homes on Vancouver’s west side.
“Overall, buyers are frustrated in this segment,” Cook said. “They’ve got a lot of money and want to spend it, but sellers again continue to dig in their heels and wait for their price.”
