Canada’s luxury real estate market began 2025 with strong momentum, but this pace slowed as concerns over the economy and global political instability emerged. The latest Luxury Market Report shows that while many Canadian markets saw impressive year-over-year sales growth in January and February—particularly in smaller cities like Saskatoon and Montreal—the latter part of the winter season experienced a shift. This change was driven by factors such as stock market fluctuations, tariffs, and rising political uncertainty.

Initially, homebuyers were eager to invest in the luxury market, buoyed by consumer confidence, strong stock market performance, and favorable lending conditions. However, this optimism quickly waned amid escalating tensions between Canada and the U.S.

Smaller cities took the lead early in the year, with sales in places like Saskatoon and Montreal doubling, while cities such as Edmonton and Ottawa saw sales rise by more than 50%. In contrast, larger, higher-priced markets like Hamilton, Greater Vancouver, and the Greater Toronto Area (GTA) experienced declines in sales.

Despite these challenges, the luxury segment remains resilient. The GTA’s ultra-luxury market continues to thrive, with several homes selling for over $7.5 million. Similarly, luxury condominiums in Vancouver and Toronto are showing positive trends, particularly following the December 2024 changes to federal mortgage insurance rules, which have supported buyers in markets like Edmonton and Saskatoon.

Shifting demographics are also driving demand, as more people relocate to cities like Calgary, Edmonton, and Saskatoon. There is also growing interest in multi-generational and downsized luxury properties.

While some markets are taking a cautious wait-and-see approach, the long-term outlook for Canada’s luxury real estate remains positive. With increasing wealth, population growth, and an impending wealth transfer, demand for high-end properties is expected to stay strong, even in the face of potential economic challenges.