Rising interest rates and stricter mortgage requirements have reduced home buyers’ purchasing power, particularly for those at the entry level of our Canadian market. The supply of apartment and townhome properties for sale today is unable to meet demand. On the other hand, the detached home market is beginning to enter buyers’ market territory.
Condo sales are in fact driving the number of properties sold at the moment. Due to demand, the condo market is experiencing some price recovery. Units in the lower price points of the condo market are likely moving rapidly because of the limited supply in the rental market which is yet another factor at play. The lack of availability is essentially forcing renters into condo ownership.
As we move further into the spring and summer months, growth in sales and selling prices is expected to pick up relative to last year. Expect stronger price growth to continue in the comparatively more affordable townhouse and condominium apartment segments.
Ontario – Higher demand for low-end properties.
Toronto, March 6, 2018 -- Toronto Real Estate Board President Tim Syrianos announced that Greater Toronto Area REALTORS® reported 5,175 residential transactions through TREB's MLS® System in February 2018. This result was down 34.9 percent compared to the record 7,955 sales reported in February 2017.
The number of new listings entered into TREB's MLS® System totaled 10,520, a 7.3% increase compared to the 9,801 new listings entered in February 2017. However, the level of new listings remained below the average for the month of February for the previous 10 years.
"When TREB released its Outlook for 2018, the forecast anticipated a slow start to the year compared to the historically high sales count reported in the winter and early spring of 2017. Prospective home buyers are still coming to terms with the psychological impact of the Fair Housing Plan, and some have also had to reevaluate their plans due to the new OFSI-mandated mortgage stress test guidelines and generally higher borrowing costs," said Mr. Syrianos.
The MLS® Home Price Index Composite Benchmark was up by 3.2% on a year-over-year basis for the TREB market area as a whole. This growth was driven by the apartment and townhouse market segments, with annual benchmark price increases of 18.8% and 7.5% respectively. Single-family detached and attached benchmark prices were down slightly compared to February 2017. The overall average selling price for February sales was down 12.4% year-over-year to $767,818. However, putting aside the price spike reported in the first quarter of 2017, it is important to note that February's average price remained 12% higher than the average reported for February 2016, which represents an annualized increase well above the rate of inflation for the past two years.
"As we move further into the spring and summer months, growth in sales and selling prices is expected to pick up relative to last year. Expect stronger price growth to continue in the comparatively more affordable townhouse and condominium apartment segments. This being said, listings supply will likely remain below average in many neighbourhoods in the GTA, which, over the long-term, could further hamper affordability," said Jason Mercer, TREB's Director of Market Analysis.
Ottawa, March 5, 2018 -- Members of the Ottawa Real Estate Board sold 979 residential properties in February through the Board’s Multiple Listing Service® System, compared with 1,002 in February 2017, a decrease of 2.3%. The five-year average for February sales is 922. February’s sales included 250 in the condominium property class and 729 in the residential property class.
“There is no doubt our sales numbers would have been much higher if we had more properties available for sale. Buyer demand is there, but our inventory in both residential-class and condos continues to decline. This is creating a supply side issue in the Ottawa real estate market,” concludes Ottawa Real Estate Board President, Ralph Shaw. “If this trend continues, the market will move to favour sellers, and buyers will find themselves competing for a limited number of listings.”
“Compounding the supply issue is the fact that after a record year last year, new construction is hindered getting to market because builders just cannot find enough land as a result of the urban boundary and land prices going up,” Shaw points out. “Given this environment, it’s a good opportunity for Sellers to get their property on the market,” he advises.
The average sale price of a residential-class property sold in February in the Ottawa area was $429,600, an increase of 2.7% over February 2017. The average sale price for a condominium-class property was $273,174, an increase of 5.6% from February 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.
“The most active price point in the residential market continues to be the $300,000 to $449,999 range, accounting for 47% of the market. While the most active price point in the condo market, between $150,000 and $249,999, accounts for 56% of the market,” Shaw notes.
“The reality is that condo sales are driving the number of properties sold at the moment. Due to demand, the condo market is experiencing some price recovery. Units in the lower price points of the condo market are likely moving rapidly because of the limited supply in the rental market which is yet another factor at play. The lack of availability is essentially forcing renters into condo ownership,” he explains.
“Ottawa is beginning to experience similar indicators that have ultimately led to challenging real estate markets in our larger metropolitan cities. It starts with supply shortages which eventually lead to affordability issues. The city in particular needs to have an intelligent vision about how to support and stimulate all aspects of the market from new construction through to the rental market availability,” Shaw elaborates.
“With this being a civic election year, we look forward to talking with our council and mayoral candidates about what measures need to be taken now to support affordability, before we develop the supply challenges of Toronto or Vancouver,” he cautions.
British Columbia - - Home buyers were less active in February
Metro Vancouver, March 6, 2018 --The Real Estate Board of Greater Vancouver (REBGV) reports that residential property sales in the region totalled 2,207 in February 2018, a nine% decrease from the 2,424 sales recorded in February 2017, and a 21.4% increase compared to January 2018 when 1,818 homes sold.
Last month’s sales were 14.4% below the 10-year February sales average. By property type, detached sales were down 39.4% over the same period, attached sales were down 6.8%, and apartment sales were 5.5% above the 10-year February average.
“Rising interest rates and stricter mortgage requirements have reduced home buyers’ purchasing power, particularly for those at the entry level of our market,” Jill Oudil, REBGV president said. “Even still, the supply of apartment and townhome properties for sale today is unable to meet demand. On the other hand, our detached home market is beginning to enter buyers’ market territory.”
There were 4,223 detached, attached and apartment properties newly listed for sale on the Multiple Listing Service® (MLS®) in Metro Vancouver in February 2018. This represents a 15.2% increase compared to the 3,666 homes listed in February 2017 and an 11.2% increase compared to January 2018 when 3,796 homes were listed.
The total number of homes currently listed for sale on the MLS® system in Metro Vancouver is 7,822, a three% increase compared to February 2017 (7,594) and a 12.6% increase compared to January 2018 (6,947).
“The spring is traditionally the busiest time for home buyers and sellers in our market. We’ll wait to see how they react to the taxes and other policy measures that our provincial and federal governments have introduced so far this year,” Oudil said. “To help you navigate these changes in today’s housing market, it’s important to work with your local REALTOR®.”
For all property types, the sales-to-active-listings ratio for February 2018 is 28.2%. By property type, the ratio is 13% for detached homes, 37.6% for townhomes, and 59.7% 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 properties in Metro Vancouver is currently $1,071,800. This represents a 16.9% increase over February 2017 and a 1.4% increase compared to January 2018.
Sales of detached properties in February 2018 reached 621, a 16.6% decrease from the 745 detached sales recorded in February 2017. The benchmark price for detached properties is $1,602,000. This represents an 8.2% increase from February 2017 and is virtually unchanged from January 2018.
Sales of apartment properties reached 1,185 in February 2018, a 7.1% decrease compared to the 1,275 sales in February 2017. The benchmark price of an apartment property is $682,800. This represents a 27.2% increase from February 2017 and a 2.6% increase compared to January 2018.
Attached property sales in February 2018 totalled 401, a 0.7% decrease compared to the 404 sales in February 2017. The benchmark price of an attached unit is $819,200. This represents an 18.1% increase from February 2017 and a 1.9% increase compared to January 2018.
Alberta - Calgary housing market prices hold, but sales fall
Calgary, March 1, 2018 – Residential home sales declined in February, but a decline in new listings helped keep prices steady this month.
Sales totaled 1.094 units in February, 18% below last year’s activity. Easing sales occurred across all property types this month, which outpaced the sales growth that occurred in January. After the first two months of the year, sales activity remains well below longer-term averages.
“Housing market conditions are still adjusting to rising lending rates and changes in lending requirements. This process is expected to be bumpy, with demand adjustments leading the changes,” said CREB® chief economist Ann-Marie Lurie.
“However, it is important to remember that it is early in the process and the impact on prices will ultimately be dependent on the supply response.”
A decline in new listings was not enough to prevent further gains in inventory levels, but it offset some of the impacts of slower sales activity. In the detached sector, one of the largest declines in sales occurred in the $600,000 - $999,999 range, while this price range also recorded gains in new listings.
“This is a market where the fundamentals of a sound pricing strategy need to be understood by sellers. At the same time, savvy buyers typically have a clear understanding of how much of a mortgage they can get,” said CREB® president Tom Westcott.
“With all the recent changes, potential purchasers should be obtaining pre-approvals so they understand exactly what they can afford prior to making an offer on a home. It also provides the flexibility in this market.”
Citywide benchmark prices totaled $434,300 in February, which is just above levels recovered last month, but comparable to levels recorded last year. While year-over-year price growth remained relatively stable in both the detached and attached markets, apartment prices remained three% below last year’s levels.