An Eventful Year for Real Estate in Canada

No matter what is said in the history books about 2016, it proved overall to be a great year for real estate in Canada.

Escalating prices caused by low supply and strong home buyer demand brought more attention to the market than ever before. As prices rose in the first half of the year, public debate waged about what was fuelling demand and what should be done to stop it. This led to multiple government interventions into the market. The long-term effects of these actions won’t be fully understood for some time.

Ontario – Record Sales in 2016

Toronto, January 5, 2017 – Toronto Real Estate Board (TREB) President Larry Cerqua announced that 2016 was a second consecutive record year for home sales. Greater Toronto Area REALTORS® reported 113,133 home sales through TREB's MLS® System – up by 11.8% compared to 2015. The calendar year 2016 result included 5,338 sales in December – an annual increase of 8.6%.

The strongest annual rate of sales growth in 2016 was experienced for condominium apartments followed by detached homes.

"A relatively strong regional economy, low unemployment and very low borrowing costs kept the demand for ownership housing strong in the GTA, as the region's population continued to grow in 2016," said Mr. Cerqua.

The annual rate of growth for the Multiple Listing Service® (MLS®) System Home Price Index (HPI) in the TREB market area accelerated throughout 2016 – from 10.7% in January 2016 to 21% in December 2016. The overall average selling price for calendar year 2016 was $729,922 – up 17.3% compared to 2015. The pace of the annual rate of growth for the average selling price also picked up throughout the year, including a climb of 20% in December.

"Price growth accelerated throughout 2016 as the supply of listings remained very constrained. Active listings at the end of December were at their lowest point in a decade-and-a-half. Total new listings for 2016 were down by almost 4.0%. In 2016, we saw policy changes and policy debates pointed at the demand side of the market. If we want to see a sustained moderation in the pace of price growth, what we really need is more policy focus on issues impacting the lack of homes available for sale," said Jason Mercer, TREB's Director of Market Analysis.

Ottawa, January 5, 2017 – Members of the Ottawa Real Estate Board (OREB) sold 715 residential properties in December through the Board’s MLS® System, compared with 703 in December 2015, an increase of 1.7%. The five-year average for December sales is 656. The total number of residential and condo units sold through the Board’s MLS® System throughout all of 2016 was 15,537, compared with 14,653 in 2015, an increase of 6.0%.

Separately, residential and condo unit sales each outperformed the 2015 numbers.
“No matter what is said in the history books about 2016, it proved overall to be a great year for Ottawa real estate,” says Rick Eisert, 2017 President of the Ottawa Real Estate Board.
“While prices remained fairly flat over the course of the year, the unit sales recorded in five separate months were the highest on record, including December. The spring market picked up early in April with strong sales and this trend continued well into the fall. The monthly unit sale performance in 2016 was often bolstered by a strengthened condo market which recorded increases over 2015 for much of the year.”

December’s sales included 165 in the condominium property class, and 550 in the residential property class. The condominium property class includes any property, regardless of style (i.e. detached, semi-detached, apartment, stacked etc.), which is registered as a condominium, as well as properties which are co-operatives, life leases and timeshares. The residential property class includes all other residential properties.

“The listing inventory for both residential and condos trended lower all year, however units sold trended higher most months, outpacing 2015 by a fair margin,” says Eisert. “Cumulative days on market increased to 123 days in December, while the average for the year stayed steady at 91 days. Average residential sale prices remained virtually unchanged over last year, however we are seeing an increase in December compared to 2015, which could be a result of a higher concentration of properties sold in the $500,000 and up range.”

The average sale price of a residential-class property sold in December in the Ottawa area was $420,750, an increase of 8.7% over December 2015. The average sale price for a condominium-class property was $262,698, an increase of 4.9% over December 2015.

The year-to-date numbers for average residential sale price in 2016 was $397,778, an increase of 1.5% over 2015. While the average condominium sale price was $260,982, an increase of 0.4% over 2015. The Board cautions that average sale price information 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 average sale price is calculated based on the total dollar volume of all properties sold.

“Looking at the whole year, the two most active price points in the residential market were $300,000 to $399,999 and then $200,000-$299,999, accounting for 54.6% of the market. While the condominium market was most active in the $150,000 to $249,999 price range, accounting for 55.4% of the market,” says Eisert. “In addition to residential and condominium sales in 2016, OREB Members have assisted clients with renting 3,053 properties, the sale of 19 farms units, and the sale of 340 commercial properties.”

British Columbia – Home Sales Post Record Year

Vancouver, January 13, 2017 – The British Columbia Real Estate Association (BCREA) reports that a record 112,209 residential unit sales were recorded by the Multiple Listing Service® (MLS®) in 2016, an increase of 9.5% from the previous year. Total sales dollar volume was a record $77.6 billion, up 18.8% from 2015. The average MLS® residential price in the province climbed 8.6% to $691,144 on an annual basis in 2016.

"Broad-based consumer demand driven by strong economic conditions, employment growth, consumer confidence, and an expanding population base pushed home sales to record levels in many BC regions last year," said Cameron Muir, BCREA Chief Economist. "However, home sales have fallen back from their lofty peaks early last year." The seasonally adjusted annual rate of sales activity was approximately 92,000 units in December.

A total of 4,721 residential unit sales were recorded by the MLS® in December, down 28.4% from the same month last year. Total sales dollar volume was $3.1 billion last month, a decline of 33.1% compared to the same month the previous year. The average MLS® residential price in the province was $654,699 in December, a 6.6% decline from December 2015.