A new report from Sotheby’s International Realty Canada reveals that while sales of $1 million-plus properties declined by 29% in the first quarter compared to the same period last year, there is room for optimism particularly when it comes to luxury properties.

Findings indicate that in the GTA, the “ultra-luxury market for properties over $10 million stood out as one of the nation’s rare real estate strongholds in the first quarter of 2025.”

Elevated inventory levels, soft demand and the retreat of smaller scale investors are placing downward pressure on prices, creating advantageous conditions for well-positioned buyers, the report says

The report also notes that a promising rebound in Canadian real estate early at the start of 2025 was swiftly derailed by rising Canada–US trade tensions, the threat and implementation of tariffs and counter-tariffs, and growing macroeconomic volatility.”

The good news, according to Dianne Usher, the senior director of talent growth and managing broker in Ontario with Sotheby’s, is that the confidence tide may be turning and not only for high-priced homes and condos.

“The reason is, is we’re sensing a stability entering the marketplace,” she said. “Here in Ontario, we’ve got two elections over and done with, we seem to have some sense of stability coming in terms of our relationship with our greatest ally, and that’s boding well for confidence coming back to the spring market.”

There is, said Usher, also multiple offers coming in for various properties, which is a good sign.

And while that is positive news for all home buyers, the news is even better for anyone in search of a luxury home.

Effi Barak, president of Sotheby’s Canadian operation, said that “Toronto’s ultra-luxury single-family home market, particularly in its most prestigious neighbourhoods, remains poised for activity.

“While buyers are increasingly selective—negotiating assertively and prepared to wait for the ‘perfect’ home – there is underlying strength in this segment. ”

Trends in other parts of Canada revealed that :

• Calgary’s luxury real estate market remains “well-positioned to withstand tariff threats and economic risks given its growth momentum from 2024. Following a record-setting population boom in 2024 that boosted Calgary’s population by 6.14% year-over-year, the city remains positioned for growth in 2025, as the province of Alberta, added 28,496 new residents in the first quarter of 2025 compared to the last quarter of 2024 according to Statistics Canada, the largest net gain of population over other Canadian provinces and territories.”

• Montreal’s housing market “outperformed national trends and stood out for steady sales activity across all property types in the first quarter of the year. Falling interest rates unleashed pent-up consumer demand across the city’s conventional market as its relatively affordable cost of housing facilitated purchases. This further enabled upward housing mobility into the city’s top-tier and luxury segments.”

Meanwhile, the report notes that Vancouver’s luxury housing market showed “cautious optimism to start the year, but this sentiment rapidly faded upon the imposition of U.S. tariffs. Canada’s escalating trade war with the US, a weakening outlook for the local economy and stringent housing policies and regulations all contributed to stifling consumer confidence and activity.

“Although the lower end of the luxury market saw some movement as buyers renewed their activity with monetary policy easing, both buyers and sellers remained hesitant overall, concerned about the impact of these geopolitical issues on the city’s economy, job market and housing values.”

Sotheby’s : Luxury Real Estate Market Starting to Rebound by Paul Barker | Postmedia Network | MSN