While most of the Canadian real estate market is still cool, The market in the Greater Toronto Area Is hastily warming up with a substantial year-over-year increase in home sales in April 2019. The number of residential transactions jumped up by 16.8% compared to April 2018. The rest of the Canadian areas are expected to follow the trend as the weather warms up for spring and summer as a result of strong economic growth and rising employment demand.
Ontario - Greater Toronto area market Is hastily warming up
Toronto, 07 May 2019 -- Toronto Real Estate Board President Garry Bhaura announced that Greater Toronto Area REALTORS® reported a substantial year-over-year increase in home sales in April 2019. The number of residential transactions jumped by 16.8% to 9,042 compared to 7,744 in April 2018. On a preliminary seasonally adjusted basis, sales were up 11.3% compared to March 2019.
New listings were also up year-over-year by eight%. However, the annual growth rate for new listings was much lower than that reported for sales. This suggests that market conditions continued to tighten which points toward an acceleration in price growth.
“The strong year-over-year growth in sales is obviously a good news story and likely represents some catchup from a slow start to the year. TREB’s sales outlook for 2019 anticipates an increase relative to 2018. It should be noted, however, that growth in new listings is not keeping pace with sales. This points to the ongoing housing supply issue in the GTA. In this regard, TREB welcomes the provincial government’s Housing Supply Action Plan announced last week to reduce red tape and improve the mix of housing types. TREB provided input on the Plan through submissions and participation on working groups,” said Mr. Bhaura.
The year-over-year rate of price growth generally edged up in April relative to the first three months of the year. The MLS® HPI Composite benchmark was up by 3.2% – the highest rate of growth in more than a year. The average selling price was up by 1.9% to $820,148, representing the strongest annual rate of growth so far in 2019. On a preliminary seasonally adjusted basis, the average selling price was also up by 1.1% compared to March 2019.
Price growth continued to be driven by the condominium apartment segment and higher-density low-rise segments. The average price for detached houses dipped year-over-year, specifically in regions surrounding the City of Toronto. The detached market segment, with the highest price point on average, has arguably been hardest hit by measures such as the OSFI stress test.
“While sales were up year-over-year in April, it is important to note that they remain well-below April levels for much of the past decade. Many potential home buyers arguably remain on the sidelines as they reassess their options in light of the OSFI-mandated two percentage point stress test on mortgages. Longer-term borrowing costs have trended lower this year and the outlook for short-term rates, for which the Bank of Canada holds the lever, is flat to down this year. Unfortunately, against this backdrop, we have seen no movement toward flexibility in the OSFI stress test,” said Jason Mercer, TREB’s Chief Market Analyst.
Ottawa, May 3, 2019 -- Members of the Ottawa Real Estate Board sold 2,032 residential properties in April through the Board’s Multiple Listing Service® System, compared with 2,024 in April 2018, an increase of 0.4%. April’s sales included 1,594 in the residential property class, on par from a year ago, and 438 in the condominium property class, an increase of 5.3% from April 2018. The five-year average for April unit sales is 1,825.
“The story hasn’t changed throughout this spring – our market is clearly suffering from low inventory, and we predict these conditions will persist until supply is restored,” states Dwight Delahunt, President of the Ottawa Real Estate Board.
“Several factors continue to have an impact in this regard including the lag in new construction coming to market and the reluctance of potential sellers who are facing limited options when they are buying within the same market. Add to this a stress test for buyers, that can limit purchasing capacity in a market where prices are accelerating, and it becomes a “Catch 22” situation for the foreseeable future.”
“Residential supply is down 18%, and condo inventory is down almost 40% from last April. Despite this tight supply, the residential market is holding its own and the increase in unit sales is effectively coming from the condo market which until recently, was in a surplus,” he notes.
The average sale price of a residential-class property sold in April in the Ottawa area was $488,729, a rise of 7.4% over April 2018. The average sale price for a condominium-class property was $307,659, an increase of 14.3% from this month last year. Year to date numbers shows a 6.6% and 8.7% increase in average prices for residential and condominiums respectively. *
“An active market with limited supply is inherently going to put upward pressure on prices,” Delahunt explains. “However, this bodes well for the condo market by which the absorption is allowing for the rebounding and recovery of its price points.”
“Certainly, the stunted supply is likely responsible for the multiple offer situations we are experiencing, but the reality is that while approximately one-third of properties are selling above asking, more than 50% are still selling below the listed price.”
“Ottawa is a stable and affordable market and has been since the 1940s – we are not in a bubble,” Delahunt emphasizes.
The increased $350,000 to $499,999 price range has now become the most active price point in the residential market, accounting for 44% of April’s transactions. Also worth noting, 28.5% of residential sales were in the $500,000 to $749,999 range up from 23-25% previously. The most prevalent price point in the condominium market which had increased to the $225,000-$349,999 price range last month, remains so, accounting for 46% of the units sold.
“The increase in price points are indicative that availability in the lower priced housing stock is just not there and is pushing people up to the higher end of the market. Nevertheless, the fact is, these price points are still well under the Canadian average, and our residents tend to be in comfortable financial situations due to secure employment and a thriving local economy,” Delahunt concludes.
In addition to residential and condominium sales, OREB Members assisted clients with renting 778 properties since the beginning of the year.
Alberta - April brings a slight inventory decline
City of Calgary, May 1, 2019 – There have been no significant changes occurring in sales activity, but the number of new listings coming onto the market continues to ease relative to 2018 levels.
The decline in new listings was enough to start chipping away at overall inventory levels, which have eased slightly compared to last year.
The slight adjustment in supply levels has helped support further reductions in the months of supply, which was 4.6 months in April. While this level still represents oversupply in our market, it does reflect an improvement from the nearly seven months of supply that we saw at the start of the year.
“Demand remains relatively weak in the resale market. However, if supply levels continue to adjust, this could help reduce the amount of oversupply and eventually support some price stability,” said CREB® chief economist Ann-Marie Lurie.
As of April, the total residential benchmark price in Calgary was $415,900. This is slightly higher than last month, but still nearly five% lower than last year’s levels.
Citywide sales were 1,547 units in April, two% higher than last year’s levels. Year-to-date sales remain nearly six% lower than last year and are 26% below longer-term averages.
“Sales have been improving mostly in the lower price ranges, causing tighter supply conditions in that segment. This will likely have a different impact on price trends in the lower price ranges depending on location,” said Lurie.
British Colombia - Reduced demand and increased supply remain the trend across Metro Vancouver’s housing market
Decreased demand continues to allow the supply of homes for sale to accumulate across the Metro Vancouver* housing market.
The Real Estate Board of Greater Vancouver (REBGV) reports that residential home sales in the region totalled 1,829 in April 2019, a 29.1% decrease from the 2,579 sales recorded in April 2018, and a 5.9% increase from the 1,727 homes sold in March 2019.
Last month’s sales were 43.1% below the 10-year April sales average.
"Government policy continues to hinder home sale activity. The federal government’s mortgage stress test has reduced buyers’ purchasing power by about 20%, which is causing people at the entry-level side of the market to struggle to secure financing. Suppressing housing activity through government policy not only reduces home sales, but it also harms the job market, economic growth and creates pent-up demand."
There were 5,742 detached, attached and apartment properties newly listed for sale on the Multiple Listing Service® (MLS®) in Metro Vancouver in April 2019. This represents a 1.3% decrease compared to the 5,820 homes listed in April 2018 and a 16% increase compared to March 2019 when 4,949 homes were listed.
The total number of homes currently listed for sale on the MLS® in Metro Vancouver is 14,357, a 46.2% increase compared to April 2018 (9,822) and a 12.4% increase compared to March 2019 (12,774).
“There are more homes for sale in our market today than we’ve seen since October 2014. This trend is more about reduced demand than increased supply,” Smith said. “The number of new listings coming on the market each month is consistent with our long-term averages. It’s the reduced sales activity that’s allowing listings to accumulate.”
The overall sales-to-active-listings ratio for April 2019 is 12.7%. By property type, the ratio is 9.4% for detached homes, 15.4% for townhomes, and 15.3% for apartments.
Generally, analysts say downward pressure on home prices occurs when the ratio dips below 12% for a sustained period, while home prices often experience upward pressure when it surpasses 20% over several months.
The MLS® Home Price Index composite benchmark price for all residential properties in Metro Vancouver is currently $1,008,400. This represents an 8.5% decrease over April 2018, and a 0.3% decrease compared to March 2019.
Detached home sales totalled 586 in April 2019, a 27.4% decrease from the 807 detached sales in April 2018. The benchmark price for a detached home is $1,425,200. This represents an 11.1% decrease from April 2018, a 0.8% decrease compared to March 2019.
Apartment home sales totalled 885 in April 2019, a 32.3% decrease compared to the 1,308 sales in April 2018. The benchmark price of an apartment is $656,900 in the region. This represents a 6.9% decrease from April 2018 and is unchanged from March 2019.
Attached home sales totalled 358 in April 2019, a 22.8% decrease compared to the 464 sales in April 2018. The benchmark price of an attached home is $783,300. This represents a 7.5% decrease from April 2018 and is unchanged from March 2019.