An Analysis Of The Real Estate Market in September
The real estate industry in Canada is always intriguing. It always generates interest from within and abroad, and the papers are always claiming that the number of transactions are always outdoing themselves months after months, even year-on-year. So what is happening so far this fall?
The statistics from the CREA appear to show that September was yet another good month for sales but that 2016 was marginally better, by 11%. This was largely the result of a jump in new supply in the GTA.
The Vancouver and Toronto areas showed good activity while other areas did not do as well.
CREA President Andrew Peck released a statement concerning the latest reports “National sales appear to be stabilizing. While encouraging, it’s too early to tell if this is the beginning of a longer-term trend. The national result continues to be influenced heavily by trends in Toronto and Vancouver but housing market conditions vary widely across Canada. All real estate is local, and REALTORS® remain your best source for information about sales and listings where you live or might like to.” The important piece of information to point out is that it seems the Toronto and Vancouver markets are having the biggest influence on the national scale. Does that have to do with the bigger prices in both provinces?
Gregory Klump, CREA’s Chief Economist, warned “Further tightening of federal regulations aimed at cooling housing markets in Toronto and Vancouver risks creating collateral damage in markets elsewhere in Canada. It also jeopardizes Canadian economic growth, which is already showing signs of fading.”
As there were more listings than sales in September, the national sales-to-new listings ratio declined to 55.7% compared to 57.2% in August. In general, a national sales-to-new listings ratio of between 40% and 60% is consistent with a balanced national housing market. However, the rule of thumb varies among local markets. Considering the degree and duration that current market balance is above or below its long-term average is a more sophisticated way of gauging whether local housing market conditions favour buyers or sellers.
Based on a comparison of the sales-to-new listings ratio with its long-term average, about two-thirds of all local markets were in balanced market territory in September 2017.
Price gains diminished in September among the ground-level benchmark homes tracked by the index and accelerated slightly for apartment units.
Apartment units again posted the largest year-on-year gains in September, followed by townhouses, one-storey single family homes and two-storey single family homes.
Summarizing some major cities around the country, benchmark home price increases have slowed in Victoria, while still doing well elsewhere on Vancouver Island. Calgary prices remained slightly positive on a year-on-year basis in September. Meanwhile, home prices accelerated on a year-on-year basis in Regina and went positive in Saskatoon, their first year-on-year gain since mid-2015. Growth accelerated in Ottawa, Greater Montreal and Greater Moncton. For Ottawa and Greater Montreal, the September 2017 year-on-year price gains were the largest since November 2010 and May 2011 respectively.