Market Watch - Housing Market Resilient in 2023, Ends Year in Balanced Territory

High borrowing costs coupled with unrealistic federal mortgage qualification standards resulted in an unaffordable home ownership market for many households in 2023. With that said, relief seems to be on the horizon. Borrowing costs are expected to trend lower in 2024. Lower mortgage rates coupled with a relatively resilient economy should see a rebound in home sales this year.

Buyers who were active in the market benefitted from more choice throughout 2023. This allowed many of these buyers to negotiate lower selling prices, alleviating some of the impact of higher borrowing costs. Assuming borrowing costs trend lower this year, look for tighter market conditions to prompt renewed price growth in the months ahead.

Ontario - Home Sales Close Out Year in Steady State. 

Toronto, 03 January 2024 -- While the overall demand for housing remained buoyed by record immigration in 2023, more of this demand was pointed at the rental market. The number of Greater Toronto Area (GTA) home sales in 2023 came in at less than 70,000 due to affordability issues brought about by high mortgage rates.

“High borrowing costs coupled with unrealistic federal mortgage qualification standards resulted in an unaffordable home ownership market for many households in 2023. With that said, relief seems to be on the horizon. Borrowing costs are expected to trend lower in 2024. Lower mortgage rates coupled with a relatively resilient economy should see a rebound in home sales this year,” said new Toronto Regional Real Estate Board (TRREB) President Jennifer Pearce.

There were 65,982 home sales reported through TRREB’s MLS® System in 2023 – a 12.1% dip compared to 2022. Despite an uptick during the spring and summer, the number of new listings also declined in 2023. The trend for listings has been largely flat-to-down over the past decade, which is problematic in the face of a steadily growing population. On a seasonally adjusted monthly basis, sales increased compared to November, while new listings declined for the third straight month.

The average selling price for all home types in 2023 was $1,126,604, representing a 5.4% decline compared to 2022. On a seasonally adjusted monthly basis, the average selling price edged higher, while the MLS® Home Price Index Composite edged lower.

“Buyers who were active in the market benefitted from more choice throughout 2023. This allowed many of these buyers to negotiate lower selling prices, alleviating some of the impact of higher borrowing costs. Assuming borrowing costs trend lower this year, look for tighter market conditions to prompt renewed price growth in the months ahead,” said TRREB Chief Market Analyst Jason Mercer.

“Record immigration into the GTA in the coming years will require a corresponding increase in the number of homes available to rent or purchase. People need to have comfort in knowing that they can plan their lives and future with the certainty that they will have the stability of an affordable place to live,” said TRREB CEO John DiMichele.

Ottawa - Home Sales Close Out Year in Steady State. 

Ottawa, January 4, 2024 -- The number of homes sold through the MLS® System of the Ottawa Real Estate Board totaled 565 units in December 2023. This was an increase of 7.6% from December 2022.

Home sales were 16% below the five-year average and 11.9% below the 10-year average for the month of December.

On a year-to-date basis, home sales totaled 11,978 units in all of 2023 — a decline of 11.0% from 2022.

“Ottawa’s resale market closed out the year in a steady, balanced state,” says OREB President Curtis Fillier. “This could be an early indication that consumer confidence is returning. We likely won’t see the full impact of rate stabilization until the second half of 2024, but December’s activity bodes well for a strong year ahead in Ottawa.”

“It hasn’t been the easiest market,” says Ken Dekker, OREB’s Past-President. “And while we probably won’t return to the peak levels seen in 2022, Ottawa’s market is poised to recover any ground lost in the past year. Both buyers and sellers need extra patience right now, but solid opportunities are there.”

By the Numbers – Prices: 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 $623,900 in December 2023, a modest gain of 2.7% from December 2022.

The benchmark price for single-family homes was $704,900, up 2.7% on a year-over-year basis in December.

By comparison, the benchmark price for a townhouse/row unit was $481,100, up 4.2% compared to a year earlier.

The benchmark apartment price was $417,200, up 2.1% from year-ago levels.

The average price of homes sold in December 2023 was $632,487, increasing 1.7% from December 2022. The more comprehensive year-to-date average price was $667,794, a decline of 5.5% from 2022.

The dollar value of all home sales in December 2023 was $357.3 million, up 9.4% from the same month in 2022.

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. Price will vary from neighbourhood to neighbourhood.

By the Numbers – Inventory & New Listings : 

The number of new listings saw a major decrease of 12.4% from December2022. There were 523 new residential listings in December 2023. New listings were 4% below the five-year average and 16.1% below the 10-year average for the month of December.

Active residential listings numbered 1,844 units on the market at the end of December, a gain of 3.0% from the end of December 2022.

Active listings were 55.5% above the five-year average and 17.2% below the 10-year average for the month of December.

Months of inventory numbered 3.3 at the end of December 2023, down from the 3.4 months recorded at the end of December 2022. 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 - Housing market resilient in 2023, ends year in balanced territory

Vancouver, 5 January 2024 --  Metro Vancouver’s1 housing market closed out 2023 with balanced market conditions, but the year-end totals mask a story of surprising resilience in the face of the highest borrowing costs seen in over a decade.

The Real Estate Board of Greater Vancouver (REBGV) reports that residential sales2 in the region totalled 26,249 in 2023, a 10.3% decrease from the 29,261 sales recorded in 2022, and a 41.5% decrease from the 44,884 sales in 2021.

Last year’s sales total was 23.4% below the 10-year annual sales average (34,272).

"You could miss it by just looking at the year-end totals, but 2023 was a strong year for the Metro Vancouver housing market considering that mortgage rates were the highest they’ve been in over a decade." Andrew Lis, REBGV director of economics and data analytics

“In our 2023 forecast, we called for modest price increases throughout the year while most other forecasters were predicting price declines. The fact that we ended the year with five-per-cent-plus gains in home prices across all market segments demonstrates that Metro Vancouver remains an attractive and desirable destination, and elevated borrowing costs alone aren’t enough to dissuade buyers determined to get into this market,” said Lis.

Properties listed on the Multiple Listing Service® (MLS®) in Metro Vancouver totalled 50,893 in 2023. This represents a 7.5% decrease compared to the 55,047 properties listed in 2022. This was 20.2% below the 63,761 properties listed in 2021.

The total number of properties listed last year was 10.5% below the region’s 10-year total annual average of (56,868).

Currently, the total number of homes listed for sale on the MLS® system in Metro Vancouver is 8,802, a 13% increase compared to December 2022 (7,791). This is 0.3% above the 10-year seasonal average (8,772).

The MLS® Home Price Index composite benchmark price for all residential properties in Metro Vancouver is currently $1,168,700. This represents a five% increase over December 2022 and a 1.4% decrease compared to November 2023.

“Ultimately, the story of 2023 is one of too few homes available relative to the pool of willing and qualified buyers,” Lis said. “Sellers were reluctant to list their properties early in the year, which led to fewer sales than usual coming out of the gate. But this also led to near record-low inventory levels in the spring, which put upward pressure on prices as buyers competed for the scarce few homes available.”

“Looking back on the year, it’s hard not to wonder how we’d be closing out 2023 if mortgage rates had been a few per cent lower than they were. And it looks like we might get some insight into that question in 2024, as bond markets and professional forecasters are projecting lower borrowing costs are likely to come, with modest rate cuts expected in the first half of the New Year.”

Residential sales in the region totalled 1,345 in December 2023, a 3.2% increase from the 1,303 sales recorded in December 2022. This was 36.4% below the 10-year seasonal average (2,114).

There were 1,327 detached, attached and apartment properties newly listed for sale on the Multiple Listing Service® (MLS®) in Metro Vancouver in December 2023. This represents a 9.9% increase compared to the 1,208 properties listed in December 2022. This was 22.7% below the 10-year seasonal average (1,716).

Across all detached, attached and apartment property types, the sales-to-active listings ratio for December 2023 is 16%. By property type, the ratio is 11.1% for detached homes, 18.7% for attached, and 19.6% 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.

Sales-to-active listings ratio - December 2023

Sales of detached homes in December 2023 reached 376, a 1.3% increase from the 371 detached sales recorded in December 2022. The benchmark price for a detached home is $1,964,400. This represents a 7.7% increase from December 2022 and a 0.9% decrease compared to November 2023.

Sales of apartment homes reached 719 in December 2023, a 2.4% increase compared to the 702 sales in December 2022. The benchmark price of an apartment home is $751,300. This represents a 5.6% increase from December 2022 and a 1.5% decrease compared to November 2023.

Attached home sales in December 2023 totalled 238, a 7.2% increase compared to the 222 sales in December 2022. The benchmark price of a townhouses is $1,072,700. This represents a 6.4% increase from December 2022 and a 1.8% decrease compared to November 2023.

Alberta - Strong migration and low supply drive Calgary housing prices in 2023

City of Calgary, Jan. 2, 2024 – Sales in 2023 did ease relative to last year's peak, but with 27,416 sales, levels were still far higher than long-term trends and activity reported before the pandemic. While sales stayed relatively strong, there was a notable shift in activity toward more affordable apartment condominiums style homes.

“Higher lending rates dampened housing demand this year, but thanks to strong migration levels, housing demand remained relatively strong, especially for affordable options in our market,” said CREB® Chief Economist Ann-Marie Lurie. “At the same time, supply levels were low compared to the demand throughout the year, resulting in stronger than expected price growth.”

Inventory levels were persistently below long-term trends for the city throughout most of the year, averaging a 44% decline over the 10-year average. We also saw the months of supply remain well below two months throughout most of the year across homes priced below $1,000,000.

The persistently tight conditions contributed to our city's new record high price. While the average annual benchmark price growth did slow from 12% in 2022 to nearly six% growth in 2023, the price growth was still relatively strong especially compared to some markets in the country.

Housing Stats December 2023:

Detached -With an annual decline of nearly 20%, the detached market saw the most significant decline in sales activity. While sales did improve for homes priced above $700,000, limited supply choices in the lower price ranges caused consumers to turn to alternative housing styles. Despite some recent gains in higher-priced new listings, inventories have remained near record lows, and the months of supply have remained relatively low throughout 2023.

The persistently tight market conditions have supported further price growth for detached homes, albeit at a slower pace than last year. On average, the benchmark price rose by nearly eight% in 2023, with the most significant gains occurring in the city's most affordable districts.

Semi-Detached - Like the detached sector, year-over-year sales growth since May was not enough to offset the pullbacks at the beginning of the year, leaving 2023 sales down by 10%. The decline in sales was driven by pullbacks for homes priced under $500,000, while sales improved for higher-priced properties. The decline in the lower range was primarily due to limited supply choices, preventing stronger sales.

Persistently tight market conditions this year caused prices to trend up throughout most of the year. On an annual basis, the benchmark price rose by seven% over last year—a slower gain than the 12% reported in 2022, but still relatively strong. Price growth ranged from a low of six% in the city centre to over 16% in the east district.

Row - Limited supply choices in the lower price ranges contributed to the pullback in sales in 2023. Annual sales declined by over 11% despite rising sales for homes priced above $400,000. While new listings did show signs of improving in the second half of the year, all of the gains were reported in the higher price ranges, causing relatively more balanced conditions in the upper price ranges versus the sellers’ market conditions in the lower price ranges.

Conditions favoured the seller throughout the year, supporting an annual benchmark price gain of over 13%. Prices improved across each district, ranging from a low of 11% in the city centre to over 20% price growth in both the North East and East districts.

Apartment Condominium - Apartment-style properties were the only property type to report a gain in sales this year, resulting in a record high of 7,884. The growth in sales was possible thanks to the higher starting point for inventory levels and gains in new listings. However, conditions tightened throughout the year, favouring the seller and driving price growth.

Apartment condominium prices finally recovered from their 2014 high earlier this year and have pushed above those levels, reaching a new record high of $321,400 by December. On an annual basis, the 2023 benchmark price rose by over 13%, a faster pace than the annual growth levels reported last year.