Market Watch February 2018 – Slower Start to 2018

January is typically the month we see the lowest number of listings come onto the market, this year was not an exception. Prices in some market segments were flat to down in January compared to last year. At this time last year, we were in the midst of a housing price spike driven by exceptionally low inventory in the marketplace. It is likely that market conditions will support a return to positive price growth for many home types in the second half of 2018.

Ontario - Slower start to 2018

Toronto, February 6, 2018 -- Toronto Real Estate Board President Tim Syrianos announced that Greater Toronto Area REALTORS® reported 4,019 residential transactions through TREB's MLS® System in January 2018. This result was down by 22%compared to a record 5,155 sales reported in January 2017.

The number of new listings entered into TREB's MLS® System amounted to 8,585 – a 17.4% increase compared to 7,314 new listings entered in January 2017. However, it is important to note that the level of new listings was the second lowest for the month of January in the past 10 years.

"TREB released its outlook for 2018 on January 30th. The outlook pointed to a slower start to 2018, especially compared to the record-setting pace experienced a year ago. As we move through the year, expect the pace of home sales to pick up, as the psychological impact of the Fair Housing Plan starts to wane and home buyers find their footing relative to the new OSFImandated stress test for mortgage approvals through federally regulated lenders," said Mr. Syrianos.

The MLS® Home Price Index Composite Benchmark was up by 5.2% year-over-year. This annual rate of growth was driven by the condominium apartment market segment, with double-digit annual growth versus the single-family segment, with prices essentially flat compared to last year. The overall average selling price was down by 4.1% year-over-year to $736,783. This decline was weighted toward the detached segment of the market. In the City of Toronto, the average selling price was up for all home types except for detached houses.

"It is not surprising that home prices in some market segments were flat to down in January compared to last year. At this time last year, we were in the midst of a housing price spike driven by exceptionally low inventory in the marketplace. It is likely that market conditions will support a return to positive price growth for many home types in the second half of 2018. The condominium apartment segment will be the driver of this price growth," said Jason Mercer, TREB's Director of Market Analysis.

Ottawa, February 5, 2018 --Members of the Ottawa Real Estate Board sold 712 residential properties in January through the Board’s Multiple Listing Service® System, compared with 664 in January 2017, an increase of 7.2%. The five-year average for January sales is 638.

“While January is typically the month we see the lowest number of listings come onto the market, the numbers for this month are very low,” Rick Eisert, 2017 President of the Ottawa Real Estate Board, observes. “The five-year average for new listings in January is 1,396 for residential and 500 for condominiums. January 2018’s listings were at 994 and 406 respectively.”

“We saw this trend throughout 2017, and the result is our resale market is being challenged by decreasing supply in both the residential and condo markets. Furthermore, as the supply continues to be reduced, it will tend to put an upward pressure on prices. This is simple supply and demand economics,” he adds.

The average sale price of a residential-class property sold in January in the Ottawa area was $427,487, an increase of 8.8% over January 2017. The average sale price for a condominium-class property was $263,744, a decrease of 8.6% from January 2017. The Board 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. Price and conditions will vary from neighbourhood to neighbourhood.

January’s sales included 173 in the condominium property class and 539 in the residential property class.

“Sales in the residential property class this month were on par with January 2017 with a minor decrease of 1.1%. Unit sales in the condo market, however, have seen an increase of 45% from 119 units sold in January 2017 to 173 units in January 2018,” Eisert explains.

“The most active price point in the residential market is the $300,000 to $449,999 range, accounting for 47.5% of the market. While the most active price point in the condo market, between $150,000 and $249,999, accounts for 55% of the market,” states Eisert. “There is a marked increase in the number of condo units sold in the lower end of the market specifically. This is likely due to the attractive lower price point and the fact that the demand is there.”

“For homeowners thinking of selling, this is a good time to get your property on the market before spring,” Eisert advises. “Since inventory is currently low, sellers will certainly get attention because selection for buyers in some areas, in particular, is quite limited.”

Alberta - Calgary sales activity similar to last year

Calgary, February 1, 2018 – The new year opened predictably, with monthly figures close to the Januarys of the past three years.

With new mortgage rules and rates officially in effect, sales activity in January remained comparable to last year, as rising sales for attached properties were not enough to offset declines in both the apartment and detached sector.  

Overall January sales totalled 958 units, nearly two% above last year and 11% below long-term averages.

"2018 was kicked off with higher rates and the official implementation of the new mortgage requirements. While it is too early to see the impact of these changes, so far, January levels are consistent with what we saw last year," said CREB® chief economist Ann-Marie Lurie.

"The recovery will be bumpy, and we will continue to monitor the impact of the lending changes relative to the overall economic climate." 

Stable sales were met with rising new listings, causing further gains in inventory levels and impacting prices. Citywide, unadjusted prices totalled $432,300, 0.21% below last month and 0.25% below last year's figures. Prices eased across all product types compared to last month, but price declines were more pronounced in the apartment and attached sectors. 

In the detached sector, new listings rose with declining sales activity for products priced over $500,000. However, product priced between $300,000 and $399,999 saw an increase in activity. This will be an adjustment to the new reality buyers and sellers face, as pockets of the market will experience a mismatch between supply and demand.

"Sellers needs to be aware of the competing supply in the market. This can influence the timing of their decision, along with setting realistic expectations regarding time on the market and selling price," said 2018 CREB® president Tom Westcott. "For buyers, getting pre-approved for a mortgage is essential, along with getting advice from a REALTOR® to get into a home they will be happy with."

British Columbia - Home buyer demand depends on property type

Greater Vancouver, February 2, 2018 -- The Real Estate Board of Greater Vancouver (REBGV) reports that residential home sales in the region totalled 1,818 in January 2018, a 19.4% increase from the 1,523 sales recorded in January 2017, and a 9.8% decrease compared to December 2017 when 2,016 homes sold.

Last month’s sales were 7.1% above the 10-year January sales average. By property type, detached sales were down 24.8% from the 10-year January average, attached sales increased 14.3% and apartment sales were up 31.6% over the same period.

“Demand remains elevated and listings scarce in the attached and apartment markets across Metro Vancouver,” Jill Oudil, REBGV president said. “Buyers in the detached market are facing less competition and have much more selection to choose. For detached home sellers to be successful, it’s important to set prices that reflect today’s market trends.”

There were 3,796 detached, attached and apartment properties newly listed for sale on the Multiple Listing Service® (MLS®) in Metro Vancouver in January 2018. This represents an 8.3% decrease compared to the 4,140 homes listed in January 2017 and a 100.7% increase compared to December 2017 when 1,891 homes were listed.

The total number of properties currently listed for sale on the MLS® system in Metro Vancouver is 6,947, a four% decrease compared to January 2017 (7,238) and a 0.2% decrease compared to December 2017 (6,958).

For all property types, the sales-to-active-listings ratio for January 2018 is 26.2%. By property type, the ratio is 11.6% for detached homes, 32.8% for townhomes, and 57.2% for condominiums.

Generally, analysts say that downward pressure on home prices occurs when the ratio dips below the 12% mark 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 homes in Metro Vancouver is currently $1,056,500. This represents a 16.6% increase over January 2017 and a 0.6% increase compared to December 2017.

Detached home sales in January 2018 reached 487, a 9.7% increase from the 444 detached sales recorded in January 2017. The benchmark price for detached properties is $1,601,500. This represents an 8.3% increase from January 2017 and a 0.3% decrease compared to December 2017.

Apartment home sales reached 1,012 in January 2018, a 22.7% increase compared to the 825 sales in January 2017. The benchmark price of an apartment property is $665,400. This represents a 27.4% increase from January 2017 and a 1.5% increase compared to December 2017.

Attached home sales in January 2018 totalled 319, a 25.6% increase compared to the 254 sales in January 2017. The benchmark price of an attached unit is $803,700. This represents a 17.5% increase from January 2017 and unchanged compared to December 2017.