2023 Luxury Outlook Report
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The third annual 2023 Luxury Outlook report is an ambitious exploration into high-end residential markets across the globe. In this report, we highlight what you can learn from past market corrections and the trends likely to shape prime housing markets in the months to come, from the projected flow of global wealth into the real estate market to luxury real estate in the metaverse.
While conventional wisdom about supply and demand and interest-rate fluctuation would suggest luxury home prices should be falling, we simply did not see that in 2022. Prices, for the most part, remained steady in 2022.
We believe the reasons for prices staying strong are multifold—first, the world’s seen a surge of wealth creation in recent years and the affluent still have more money to spend; second, many luxury purchases are made in cash, so the high-end sector remains somewhat insulated from interest-rate fluctuations. Finally, there’s a lifestyle change resulting from Covid-19 that we believe is here to stay: people are spending more of their time at home and putting more of an emphasis on their home lives, even as the world has opened up. What that means is luxury homeowners can rationalize the expenses of owning multiple properties since they are spending more time in them, and are therefore less likely to put them up for sale. As such, inventory continues to be low coupled with an undersupply of new construction.
Luxury agents remain busy brokering deals for their clients, many of whom are looking to make opportunistic investments during a fluctuating market.
In the pages that follow, we’ll also look beyond the real estate sector, to see what consumers of luxury goods desire, from sustainable luxury items, to record-breaking auction sales, to wine investments. Now more than ever, we know that the affluent want to spend their equity wisely, and we’re here to help them do just that.
This article was originally published in Sotheby’s International Realty’s Insight Art of Living blog in Janaury 2023.
*Disclaimer
The information contained in this report references market data from MLS boards across Canada. Sotheby’s International Realty Canada cautions that MLS market data can be useful in establishing trends over time but does not indicate actual prices in widely divergent neighbourhoods or account for price differentials within local markets. This report is published for general information only and not to be relied upon in any way. Although high standards have been used in the preparation of the information and analysis presented in this report, no responsibility or liability whatsoever can be accepted by Sotheby’s International Realty Canada or Sotheby’s International Realty Affiliates for any loss or damage resulting from any use of, reliance on, or reference to the contents of this document.
