Housing Market Becoming More Affordable

The Bank of Canada’s rate cut announced on September 4 will lead to a further improvement in affordability, especially for those using variable-rate mortgages. First-time buyers are especially sensitive to changes in borrowing costs. As mortgage rates continue to trend lower this year and next, we should experience an uptick in first-time buying activity, including in the condo market.

 Ontario - Housing Market Becoming More Affordable

September 5, 2024 -- Greater Toronto Area (GTA) home sales were down on a year-over-year basis in August 2024. New listings were up slightly over the same period. While the region’s housing market remained well-supplied in August, average home prices only edged slightly lower compared to August 2023.

“The Bank of Canada’s rate cut announced on September 4 will lead to a further improvement in affordability, especially for those using variable rate mortgages. First-time buyers are especially sensitive to changes in borrowing costs. As mortgage rates continue to trend lower this year and next, we should experience an uptick in first-time buying activity, including in the condo market,” said Toronto Regional Real Estate Board (TRREB) President Jennifer Pearce.

GTA REALTORS® reported 4,975 home sales through TRREB’s MLS® System in August 2024 – down by 5.3% compared to 5,251 sales reported in August 2023. New listings entered into the MLS® System amounted to 12,547 – up by 1.5% year-over-year. On a seasonally adjusted basis, August sales edged up on a monthly basis compared to July, whereas new listings were down slightly compared to the previous month.

The MLS® Home Price Index Composite benchmark was down by 4.6% year-over-year in August 2024. The average selling price was down by a lesser 0.8% compared to August 2023 to $1,074,425. The different annual rates of change between the MLS® HPI Composite and the average selling price were largely due to an increase in the share of detached home sales compared to last year, impacting the average price. On a seasonally adjusted basis, the average selling price edged lower compared to July.

“As borrowing costs trend lower over the next year-and-a-half, home buyers will initially benefit from both lower monthly mortgage payments and lower home prices. Even as demand picks up, especially in 2025, it will take time for the inventory of listings to be absorbed. Ample choice in the market will help keep price growth moderate, at least in the initial phases of recovery,” said TRREB Chief Market Analyst Jason Mercer.

“Today’s elevated listing inventory will ultimately recede. We need to maintain a sustained focus on boosting home construction, especially as it relates to producing the right mix of home types to meet consumers’ needs. This new housing also has to be affordable. Municipalities can help by reducing development charges, which are ultimately passed on to home buyers. If people can’t find affordable housing in the GTA or surrounding Greater Golden Horseshoe, they will move elsewhere, and not necessarily to other parts of Ontario or Canada. Housing is a key driver of our region’s economic development,” said TRREB CEO John DiMichele.

Ottawa’s Hot Summer Market Expected to Extend into Fall

September 5, 2024 -- The number of homes sold through the MLS® System of the Ottawa Real Estate Board (OREB) totaled 1,100 units in August 2024. This was a 10.2% increase from August 2023.

Home sales were 11.4% below the five-year average and 14.1% below the 10-year average for the month of August.

On a year-to-date basis, home sales totaled 9,444 units in August 2024 — an increase of 6.0% from the same period in 2023.

“Being a seasonal market, it’s very encouraging to see sustained levels of activity throughout the whole summer,” says OREB President-elect Paul Czan. “And coupled with a third consecutive interest rate drop from the Bank of Canada, we are anticipating a heated market in the fall.”

“REALTORS® know firsthand how affordability remains a top concern for most buyers. With a stream of new listings hitting the market and prices holding steady, buyers are not moving with urgency. They are still using caution and taking their time to find the right property for their needs and budget. As such, sellers need to be patient and work with a REALTOR® who can use the latest neighbourhood-level data and insights to properly price their property and build a selling strategy.”

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 $646,000 in August 2024, a decrease of 0.3% from August 2023.

The benchmark price for single-family homes was $732,500, down 0.3% on a year-over-year basis in August.

By comparison, the benchmark price for a townhouse/row unit was $502,200, up 0.3% compared to a year earlier.

The benchmark apartment price was $416,800, down 1.2% from year-ago levels.

The average price of homes sold in August 2024 was $660,341 increasing 0.3% from August 2023. The more comprehensive year-to-date average price was $678,327, increasing by 0.9% from August 2023.

The dollar volume of all home sales in August 2024 was $726.3 million, up 10.5% from August 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 0.2% from August 2023. There were 1,907 new residential listings in August 2024. New listings were 0.2% above the five-year average and 0.9% above the 10-year average for the month of August.

Active residential listings numbered 3,324 units on the market at the end of August 2024, a gain of 25.8% from August 2023. Active listings were 46.5% above the five-year average and 1.3% below the 10-year average for the month of August.

Months of inventory numbered 3.0 at the end of August 2024, up from 2.6 in August 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 - Residential property sales in Metro Vancouver

September 5, 2024 -- Home sales registered on the MLS® in Metro Vancouver1 remained below their ten-year seasonal averages in August as summer holidays come to a close.

Greater Vancouver REALTORS® (GVR)2 reports that residential sales in the region totalled 1,904 in August 2024, a 17.1% decrease from the 2,296 sales recorded in August 2023. This total was also 26% below the 10-year seasonal average (2,572).

"From a seasonal perspective, August is typically a slower month for sales than June or July. In this respect, this August has been no different. With that said, sales remain in a holding pattern, trending roughly 20% below their 10-year seasonal average, which suggests buyers are still feeling the pinch of higher borrowing costs, despite two recent quarter percentage point reductions to the policy rate this summer."

Andrew Lis, GVR director of economics and data analytics

There were 4,109 detached, attached and apartment properties newly listed for sale on the Multiple Listing Service® (MLS®) in Metro Vancouver in August 2024. This represents a 4.2% increase compared to the 3,943 properties listed in August 2023. This total was 1.7% below the 10-year seasonal average (4,179).

The total number of properties currently listed for sale on the MLS® system in Metro Vancouver is 13,812, a 37% increase compared to August 2023 (10,082). This total is also 20.8% above the 10-year seasonal average (11,432).

Across all detached, attached and apartment property types, the sales-to-active listings ratio for August 2024 is 14.3%. By property type, the ratio is 9.6% for detached homes, 18% for attached, and 17.2% for apartments.

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.

“Buyers’ hesitancy to enter the market, paired with new listing activity on the part of sellers that is in line with historical averages, has allowed inventory to accumulate for a number of months and has moved the market firmly into balanced conditions,” Lis said.

“With the Bank of Canada’s decision to reduce the policy rate today by another quarter percentage point, and with September being a month that typically sees an increase in sales from a seasonal perspective, the fall market is set up to bring more buyers off the sidelines. We will watch the upcoming September data to see whether they decide to show up.” 

The MLS® Home Price Index composite benchmark price for all residential properties in Metro Vancouver is currently $1,195,900. This represents a 0.9% decrease over August 2023 and a 0.13% decrease compared to July 2024.

Sales of detached homes in August 2024 reached 509, a 13.9% decrease from the 591 detached sales recorded in August 2023. The benchmark price for a detached home is $2,048,400. This represents a 1.8% increase from August 2023 and a 0.1% decrease compared to July 2024.

Sales of apartment homes reached 1,012 in August 2024, a 20.3% decrease compared to the 1,270 sales in August 2023. The benchmark price of an apartment home is $768,200. This represents a 0.1% decrease from August 2023 and unchanged compared to July 2024.

Attached home sales in August 2024 totalled 370, a 12.3% decrease compared to the 422 sales in August 2023. The benchmark price of a townhouse is $1,119,300. This represents a 0.8% increase from August 2023 and a 0.5% decrease compared to July 2024.

Alberta - Calgary housing market sees shifts

Calgary, September 3, 2024 - Housing activity continues to move away from the extreme sellers’ market conditions experienced throughout the spring. Easing sales, combined with gains in supply, pushed the months of supply above two months in August, a level not seen since the end of 2022.

As expected, rising new home construction and gains in new listings are starting to support a better-supplied housing market,” said Ann-Marie Lurie, Chief Economist at CREB®. “This trend is expected to continue throughout the remainder of the year, but it’s important to note that supply levels remain low, especially for lower-priced properties. It will take time for supply levels to return to those that support more balanced conditions.

Inventory levels in August reached 4,487 units, 37% higher than last August but nearly 25% lower than long-term trends for the month. Higher-priced properties mostly drove the supply gains, as the most affordable homes in each property type continued to report supply declines.

The supply gains were made possible by both an increase in new listings in August and a pullback in sales activity. There were 2,186 sales in August, representing a 20% decline from last year's record high but still 17% higher than long-term averages for the month. The sales declines were driven by homes priced below $600,000.

Following stronger-than-expected gains earlier in the year, the pace of price growth is starting to slow. In August, the total unadjusted residential benchmark price was $601,800, six% higher than last year and just slightly lower than last month. Year-to-date, the average benchmark price rose by nine%.

August 2024 Housing Statistics

Detached - Detached home sales fell by 14% compared to last year, as gains in homes priced above $600,000 were not enough to offset declines in the lower price ranges, which continue to struggle with low supply levels. In August, there were 2,011 detached homes available in inventory, with over 85% priced above $600,000.

The improving higher-end supply compared to sales helped push the months of supply up to nearly two months. While market conditions are still tight, this is a significant improvement from the under-one-month supply experienced in the spring. Shifting conditions are relieving some pressure on home prices. In August, the unadjusted detached benchmark price was $762,600, slightly lower than last month but still over nine% higher than last year.

Semi-Detached - With 297 new listings and 172 sales, the sales-to-new-listings ratio in August dropped to 58%, which is more consistent with pre-pandemic levels. This shift supported a rise in inventory levels, and the months of supply rose to nearly two months.

While conditions remain relatively tight, the boost in new listings has helped ease some of the pressure on prices. In August, the unadjusted benchmark price was $681,200, a decline from last month but nearly 10% higher than last year.

Row - New listings row for homes priced above $400,000, contributing to year-to-date growth of nearly 16%. At the same time, slower sales over the past three months have contributed to inventory gains. In August, there were 660 units available, a 75% increase over the exceptionally low levels reported last year. While inventories are still low by historical standards, as with other property types, this shift is helping ease pressure on home prices.

The unadjusted benchmark price in August was $461,700, slightly lower than last month but over 12% higher than last August. Monthly adjustments were not consistent across districts, with adjustments in the City Centre, North West, North, and West districts mostly driving monthly declines. Despite the monthly adjustments, year-over-year prices remain higher than last year across all districts and range from a low of 10% in the City Centre to a high of 26% in the East district.

Apartment Condominium - New listings in August reached 1,001 units, a record high for the month. The gains in new listings were met with a pullback in sales, causing the sales-to-new-listings ratio to drop to 60% and inventories to rise to 1,476 units. Unlike other property types, overall condominium inventory levels were relatively consistent with longer-term trends for the month.

Rising inventory and easing sales caused the months of supply to increase to nearly two and a half months, not as high as levels seen before the pandemic but an improvement over the extremely tight conditions seen over the past 18 months. In August, the unadjusted benchmark price was $346,500, similar to last month and nearly 16% higher than last year’s prices.