With recent price declines in Canada's hot real estate markets (Vancouver and Toronto) there's been talk of a slowdown. But, so far, it's hardly something for prospective buyers to get excited about.
While prices did drop after the introduction of a foreign home buyers tax in Vancouver last year, they're once again surging to new highs.
In Toronto, both prices and sales have taken a dive since the same type of tax came into effect in April. However, Toronto home prices are still up compared to last year and some industry experts predict that, as in Vancouver, the city's recent dip will simply be a blip.
Most industry experts predict the Toronto downturn will be temporary. That's because, like Vancouver, they believe it's based on psychology with apprehensive buyers waiting to see how the foreign buyer's tax announcement shakes down.
Ontario - Market Continued to Adjust in July
Toronto, August 3, 2017 -- Toronto Real Estate Board President Tim Syrianos announced that Greater Toronto Area REALTORS® reported 5,921 residential transactions through TREB's MLS® System in July 2017. This result was down by 40.4 per cent on a yearover- year basis, led by the detached market segment – both in the City of Toronto and surrounding regions. While sales were down, the number of new listings reported were only slightly (+5.1 per cent) above last year's level.
"A recent release from the Ontario government confirmed TREB's own research which found that foreign buyers represented a small proportion of overall home buying activity in the GTA. Clearly, the year-over-year decline we experienced in July had more to do with psychology, with would-be home buyers on the sidelines waiting to see how market conditions evolve," said Mr. Syrianos.
"Summer market statistics are often not the best indicators of housing market conditions. We generally see an uptick in sales following Labour Day, as a greater cross-section of would-be buyers and sellers start to consider listing and/or purchasing a home. As we move through the fall, we should start to get a better sense of the impacts of the Fair Housing Plan and higher borrowing costs," said TREB CEO John DiMichele.
The MLS® Home Price Index (HPI) Composite Benchmark price was up by 18 per cent on a year-over-year basis. However, the Composite Benchmark was down by 4.6 per cent relative to June. Monthly MLS® HPI declines were driven more so by single-family home types. The average selling price for all home types combined was up by five per cent year-over-year to $746,218.
"Home buyers benefitted from more choice in the market this July compared to the same time last year. This was reflected in home prices and home price growth. Looking forward, if we do see some would-be home buyers move off the sidelines and back into the market without a similar increase in new listings, we could see some of this newfound choice erode. The recent changes in the sales and price trends have masked the fact that housing supply remains an issue in the GTA," said Jason Mercer, TREB's Director of Market Analysis.
Ottawa, August 3, 2017 - Members of the Ottawa Real Estate Board sold 1,530 residential properties in July through the Board’s Multiple Listing Service® System, compared with 1,490 in July 2016, an increase of 2.7 per cent. The five-year average for July sales is 1,446.
“The Ottawa resale market continued its steady pace into mid-summer, with condo sales really bolstering the market this past month,” says Rick Eisert, President of the Ottawa Real Estate Board. “We’ve actually been seeing this positive trend since February. The condo market had been in a slump for the past few years because it was overbuilt. Some owners who had difficulty selling their condos rented them instead, thereby decreasing supply. Now as rental leases are coming due, combined with evidence of stronger condo sales, these owners are placing these units back on the market for sale. Meanwhile, residential sales have remained virtually the same in comparison to this time last year.”
July’s sales included 332 in the condominium property class and 1,198 in the residential property class. “The number of new listings coming onto the market continues to be on the lower end of the five-year average, especially where residential units are concerned,” explains Eisert. “Inventory levels continue to tighten, however the choice for buyers continues to be decent, with both entry-level properties and higher-end properties available, particularly in the condo market.”
“Cumulative days on market has been holding pretty steady throughout the course of 2017,” says Eisert. “However, when compared to numbers from 2016, residential properties in July 2017 are selling almost 22 per cent faster and condos just over 11 per cent faster than July of last year.”
The average sale price of a residential-class property sold in July in the Ottawa area was $420,335, an increase of 5.3 per cent over July 2016. The average sale price for a condominium-class property was $267,641, an increase of 2.8 per cent over July 2016. 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.
“Ottawa buyers are beginning to see prices climb in certain areas of the Ottawa market, so they are getting in on the market now,” says Eisert. “We continue to see an increase in the number of ‘lifestyle’ properties sold – the $750+ price range. As prices and the number of units sold in higher-end price ranges increase, so does the total sales volume. The condo market sales volume is up 32 per cent over last year, while the residential market is up by 16.5 per cent.”
“The two most active price points in the residential market continue to be the $300,000 to $399,999 followed by the $400,000 to $499,999 range, combined accounting for 56.1 per cent of the market. Within the condo market, the most active price point was between $150,000 and $249,999, accounting for 50.7 per cent of the market,” says Eisert. “In addition to residential and condominium sales, OREB Members assisted clients with renting 1,825 properties since the beginning of the year.”
British Columbia - Demand for condominiums continues to outstrip supply
Vancouver, July 5, 2017 - The imbalance between supply and demand in the condominium market is creating home buyer competition across Metro Vancouver.
The Real Estate Board of Greater Vancouver (REBGV) reports that residential property sales in the region totalled 3,893 in June 2017, an 11.5 per cent decrease from the 4,400 sales recorded in June 2016, an all-time record, and a decrease of 10.8 per cent compared to May 2017 when 4,364 homes sold.
Last month’s sales were 14.5 per cent above the 10-year June sales average.
“Two distinct markets have emerged this summer. The detached home market has seen demand lease back to more typical levels while competition for condominiums is creating multiple offer scenarios and putting upward pressure on prices for that property type,” Jill Oudil, REBGV president said.
There were 5,721 detached, attached and apartment properties newly listed for sale on the Multiple Listing Service® (MLS®) in Metro Vancouver in June 2017. This represents a 2.6 per cent decrease compared to the 5,875 homes listed in June 2016 and a 5.3 per cent decrease compared to May 2017 when 6,044 homes were listed.
The total number of properties currently listed for sale on the MLS® system in Metro Vancouver is 8,515, a nine per cent increase compared to June 2016 (7,812) and a 4.2 per cent increase compared to May 2017 (8,168).
“Home buyers have more selection to choose from in the detached market today while condominium listings are near an all-time low on the MLS®,” Oudil said. “Detached home listings have increased every month this year, while the number of condominiums for sale has decreased each month since February.”
For all property types, the sales-to-active listings ratio for June 2017 is 45.7 per cent. By property type, the ratio is 24.5 per cent for detached homes, 62 per cent for townhomes, and 93.2 per cent for condominiums.
Generally, analysts say that downward pressure on home prices occurs when the ratio dips below the 12 per cent mark for a sustained period, while home prices often experience upward pressure when it surpasses 20 per cent over several months.
“Market conditions will vary today depending on area and property type,” Oudil said. “It’s important to work with your local REALTOR® to help you understand the trends that are occurring in your community.”
The MLS® Home Price Index composite benchmark price for all residential properties in Metro Vancouver is currently $998,700. This represents a 7.9 per cent increase over June 2016 and a 1.8 per cent increase compared to May 2017.
Sales of detached properties in June 2017 reached 1,320, a decrease of 15.5 per cent from the 1,562 detached sales recorded in June 2016. The benchmark price for detached properties is $1,587,900. This represents a 1.4 per cent increase from June 2016 and a 1.1 per cent increase compared to May 2017.
Sales of apartment properties reached 1,905 in June 2017, a decrease of 9.6 per cent compared to the 2,108 sales in June 2016. The benchmark price of an apartment property is $600,700. This represents a 17.6 per cent increase from June 2016 and a 2.9 per cent increase compared to May 2017.
Attached property sales in June 2017 totalled 668, a decrease of 8.5 per cent compared to the 730 sales in June 2016. The benchmark price of an attached unit is $745,700. This represents a 10.7 per cent increase from June 2016 and a 0.6 per cent increase compared to May 2017.