Market watch - Canadian Home Sales Continued at Low Levels

May home sales continued at low levels, especially in comparison to last spring’s short-lived pick-up in market activity. Home buyers are still waiting for relief on the mortgage rate front. Existing homeowners are anticipating an uptick in demand, as evidenced by a year-over-year increase in new listings. With more choices compared to a year ago, buyers benefitted from more negotiating room on prices.

 

Ontario  -  May home sales continued at low levels

Toronto, June 6, 2024 -- May home sales continued at low levels, especially in comparison to last spring’s short-lived pick-up in market activity. Home buyers are still waiting for relief on the mortgage rate front. Existing homeowners are anticipating an uptick in demand, as evidenced by a year-over-year increase in new listings. With more choices compared to a year ago, buyers benefitted from more negotiating room on prices.

“Recent polling from Ipsos indicates that home buyers are waiting for clear signs of declining mortgage rates. As borrowing costs decrease over the next 18 months, more buyers are expected to enter the market, including many first-time buyers. This will open up much-needed space in a relatively tight rental market,” stated Toronto Regional Real Estate Board (TRREB) President Jennifer Pearce.

Greater Toronto Area REALTORS® reported 7,013 home sales through TRREB’s MLS® System in May 2024 – a 21.7% decline compared to 8,960 sales reported in May 2023. New listings entered into the MLS® System amounted to 18,612 – up by 21.1% year-over-year.

The MLS® Home Price Index Composite benchmark was down by 3.5% on a year-over-year basis in May 2024. The average selling price of $1,165,691 was down by 2.5% over the May 2023 result of $1,195,409. On a seasonally adjusted monthly basis, the average selling price edged up slightly compared to April 2024.

“While interest rates remained high in May, home buyers did continue to benefit from slightly lower selling prices compared to last year. We have seen selling prices adjust to mitigate the impact of higher mortgage rates. Affordability is expected to improve further as borrowing costs trend lower. However, as demand picks up, we will likely see renewed upward pressure on home prices as competition between buyers increases,” said TRREB Chief Market Analyst Jason Mercer.

“In order to have an affordable and livable region over the long term, we need to see a coordinated effort from all levels of government to alleviate our current housing deficit and to provide housing for new population moving forward. On top of this, governments need to ensure the delivery of infrastructure to support our growing population. The economic health and liveability of our region depends on the timely completion of public transit projects including better transparency and clear timelines on the completion of the Eglinton Crosstown LRT,” said TRREB CEO John DiMichele.

 

 

Ottawa - May Home Sales in Ottawa Smooth and Cautious

Ottawa- June 6, 2024 -- The number of homes sold through the MLS® System of the Ottawa Real Estate Board (OREB) totaled 1,545 units in May 2024. This was a decrease of 9.2% from May 2023.

Home sales were 3.7% below the five-year average and 13.2% below the 10-year average for the month of May.

On a year-to-date basis, home sales totaled 5,673 units over the first five months of the year — an increase of 5.2% from the same period in 2023.

Ottawa’s early spring market was unsurprisingly steady,” says OREB President Curtis Fillier. “The increase in new listings indicate that sellers are more confident that properties are moving as more activity returns to the market. Some sellers, however, were likely waiting for the Bank of Canada’s interest rate announcement to see if it would affect their purchasing power. The first interest rate cut in four years is good news, but expectations still need to be managed as long as supply issues and high home prices persist.”

“Interest rate cuts, for example, can’t help get more homes built and make them affordable when the City of Ottawa is hiking development fees — a counterproductive move that OREB is firmly against.”

The MLS® Home Price Index (HPI) tracks price trends far more accurately than is possible using average or median price measures.

The overall MLS® HPI composite benchmark price was $651,300 in May 2024, a marginal gain of 1.2% from May 2023.

The benchmark price for single-family homes was $736,000, up 1.1% on a year-over-year basis in May.

By comparison, the benchmark price for a townhouse/row unit was $517,500, up 2.1% compared to a year earlier.

The benchmark apartment price was $425,000, up 2.0% from year-ago levels.

The average price of homes sold in May 2024 was $690,683 increasing 0.8% from May 2023. The more comprehensive year-to-date average price was $679,862, increasing by 1.8% from the first five months of 2023.

The dollar volume of all home sales in May 2024 was $1.06 billion, down 8.5% from the same month in 2023.

OREB cautions that the average sale price can be useful in establishing trends over time but should not be used as an indicator that specific properties have increased or decreased in value. The calculation of the average sale price is based on the total dollar volume of all properties sold. Prices will vary from neighbourhood to neighbourhood.

The number of new listings saw an increase of 26.2% from May 2023. There were 3,034 new residential listings in May 2024. New listings were 23.2% above the five-year average and 10.2% above the 10-year average for the month of May.

Active residential listings numbered 3,552 units on the market at the end of May 2024, a gain of 59.4% from May 2023. Active listings were 72.2% above the five-year average and 2.9% below the 10-year average for the month of May.

Months of inventory numbered 2.3 at the end of May 2024, up from 1.3 in May 2023. The number of months of inventory is the number of months it would take to sell current inventories at the current rate of sales activity.

 

Britsh Columbia - Home sales down in May while inventory continues to increase

Metro Vancouver, 6 June 2024 -- The number of transactions on the Multiple Listing Service® (MLS®) declined in May compared to what is typical for this time of year in Metro Vancouver1. This shift has allowed the inventory of homes available for sale to continue to accumulate with over 13,000 homes now actively listed on the MLS® in the region.

The Greater Vancouver REALTORS® (GVR)2 reports that residential sales in the region totalled 2,733 in May 2024, a 19.9% decrease from the 3,411 sales recorded in May 2023. Last month’s sales total was also down 19.6% from the 10-year seasonal average for May (3,398).

"The surprise in the May data is that sales have come in softer than what we’d typically expect to see at this point in the year, while the number of newly listed homes for sale is carrying some of the momentum seen in the April data."

Andrew Lis, REBGV director of economics and data analytics

"It’s a natural inclination to chalk these trends up to one factor or another, but what we’re seeing is a culmination of factors influencing buyer and seller decisions in the market right now. It’s everything from higher borrowing costs to worries about the economy, to policy interventions imposed by various levels of government."

 

There were 6,374 detached, attached and apartment properties newly listed for sale on the MLS® in Metro Vancouver in May 2024. This represents a 12.6% increase compared to the 5,661 properties listed in May 2023 and a 7% increase compared to the 10-year seasonal average (5,958).

The total number of properties currently listed for sale on the MLS® system in Metro Vancouver is 13,600, a 46.3% increase compared to May 2023 (9,293). This total is also up 19.9% above the 10-year seasonal average (11,344).

Across all detached, attached and apartment property types, the sales-to-active listings ratio for May 2024 is 20.8%. By property type, the ratio is 16.8% for detached homes, 25.1% for attached, and 22.5% for apartment properties.

Analysis of the historical data suggests 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.

“With market trends now tilting back toward more balanced conditions, as the number of new listings outpaces the number of sales, we should expect to see slower price growth over the coming months,” Lis said.

“Up until recently, prices were climbing modestly across all market segments. But with rising inventory levels and softening demand, buyers who’ve been waiting for an opportunity might have more luck this summer, even if borrowing costs remain elevated.”

The MLS® Home Price Index (HPI) composite benchmark price3 for all residential properties in Metro Vancouver is currently $1,212,000. This represents a 2.3% increase over May 2023 and a 0.5% increase compared to April 2024.

Sales of detached homes in May 2024 reached 846, an 18.9% decrease from the 1,043 detached sales recorded in May 2023. The benchmark price for a detached home is $2,062,600. This represents a 5.9% increase from May 2023 and a 1.3% increase compared to April 2024.

Sales of apartment homes reached 1,338 in May 2024, a 22.7% decrease compared to the 1,730 sales in May 2023. The benchmark price of an apartment home is $776,200. This represents a 2.2% increase from May 2023 and a 0.3% decrease compared to April 2024.

Attached home sales in May 2024 totalled 523, a 14% decrease compared to the 608 sales in May 2023. The benchmark price of a townhouse is $1,145,500. This represents a 5.2% increase from May 2023 and a 0.9% increase compared to April 2024.

 

 

Alberta - Price growth persists in Calgary as seller's market prevails

City of Calgary, May 1, 2024 – Sales in April rose by 7% compared to last year, to 2,881 units. While the pace of growth did ease compared to earlier in the year, sales remain 37% higher than long-term trends for the month. Much of the growth in sales has occurred for relatively more affordable, higher-density products.

At the same time, there were 3,491 new listings in April, an 11% gain over last year but only 3% higher than long-term trends. The rise in new listings compared to sales prevented any further deterioration of the inventory situation. However, with 2,711 units in inventory, levels are 16% below last year and half of what is traditionally seen in April.

“While supply levels are still declining, much of the decline has been driven by lower-priced homes," said Ann-Marie Lurie, Chief Economist at CREB®. “Homes priced below $500,000 have reported a 29% decline. Meanwhile, we are seeing supply growth in homes priced above $700,000. Persistently high-interest rates are driving demand toward more affordable products in the market and, at the same time, driving listing growth for higher-priced properties.”

With a sales-to-new-listings ratio of 83% and a months of supply of less than one month, conditions continue to favour the seller, driving further price gains in the market. In April, the unadjusted total residential benchmark price reached $603,700, a 1% gain over last month and nearly 10% higher than last year's levels. Price gains occurred across all property types and districts of the city. The strongest price growth occurred in the more affordable districts of the city. 

Detached - Detached home sales rose by 1% in April compared to last year. Sales gains in the higher price ranges offset the steep decline for homes priced below $600,000, which is related to the lack of listings in the lower price ranges. While detached new listings did report a year-over-year gain of 10%, detached homes priced below $600,000 saw new listings decline by 34%. 

Adjustments in sales and inventory levels caused the months of supply to fall further this month. The less than one-month supply reflects a market favouring the seller, driving further price growth. In April, the unadjusted benchmark price reached $749,000, over 1% higher than last month and 13% higher than April 2023 levels. Year-over-year gains were the highest in the city's most affordable districts.

Semi-Detached - Sales activity continued to rise in April, contributing to the nearly 18% year-to-date growth in sales. The growth in sales was partly due to gains in new listings. However, the growth in new listings did little to change the low inventory situation, as the months of supply remained below one month for the second month in a row. 

The persistently tight market conditions have caused further price gains. In April, the unadjusted benchmark price reached $668,400, nearly 2% higher than last month and 13% higher than levels reported last year. Year-over-year price gains ranged from a high of 23% in the East district to a low of 10% in the City Centre. 

Row - Row home sales continued to improve in April, contributing to the 19% year-to-date gain. At the same time, new listings have improved by 16% so far this year. The gains in new listings did little to change the low inventory situation due to sales activity. This has kept the sales-to-new-listings ratio high at 93% and the months of inventory below one month for the fourth consecutive month.

The persistently tight conditions, especially in the lower price ranges, are driving further price growth for row homes. In April, the unadjusted benchmark price reached $458,100, 2% higher than last month and 20% higher than levels reported last year. Both monthly and year-over-year gains were the highest in the most affordable districts of the North East and East, where resale row homes are still priced below $400,000. 

Apartment Condominium - Sales in April reached 822 units, contributing to year-to-date sales of 2,761 units, a 24% gain. Apartment condominium sales have risen more than any other property type and now represent nearly 30% of all resale activity. This, in part, has been possible due to the rise in new listings. April reported 1,050 new listings, helping support a monthly gain in inventory levels in line with seasonal expectations. However, inventory levels remain nearly 13% lower than last year’s and are 35% below long-term trends. 

Like other property types, year-over-year supply declines are driven by the lower-priced segments of the market, which for apartment condominiums is units priced below $300,000. Overall, persistent sellers’ market conditions in the lower price ranges are driving further price growth. In April, the unadjusted benchmark price reached $346,200 a month, a gain of over 2% and nearly 18% higher than last April. Year-over-year price growth ranged from over 30% in the North East and East districts to a low of 13% in the City Centre.

 




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