Here’s hoping the last six months of declining home sales didn’t give homebuyers the false impression that Canada’s real estate market has cooled. It’s still historically hot.
Home sales in September showed a modest month-over-month increase, according to data from the Canadian Real Estate Association . Despite only rising by 0.9 per cent, the increase was the first since March.
At this point in Canada’s seemingly inexhaustible real estate boom, when the number of homes on the market is scraping rock bottom, any increase in sales is near miraculous. But it doesn’t mean conditions have improved for buyers.
If anything, they’re just getting worse.
Last month, home sales across Canada fell by 17.5 per cent compared to September 2020. But demand isn’t tapering off. In fact, CREA says it was the second-busiest September on record.
Fewer sales aren’t always the result of buyers leaving the market. In Canada’s case, they just have far fewer properties to make offers on than they did a year ago.
“There is still a lot of demand chasing an increasingly scarce number of listings, so this market remains very challenging,” Cliff Stevenson, chair of CREA, says in a statement.
One stat to keep an eye on is the sales-to-new-listings ratio, which is a solid indicator of supply-demand dynamics. A balanced market is typically in the range of 40 per cent sales to 60 per cent new listings, with 60 per cent and above for listings indicating a sellers’ market.
In September, Canada’s sales-to-new-listings ratio hit 75.1 per cent, meaning buyers snapped up more than three-quarters of new listings by the end of the month.
It’s no surprise, then, that the national average price of homes sold in September — $686,650 — was 13.9 per cent higher than a year ago.
Sales in Ontario were down 20.8 per cent compared to September 2020, but they were still 11.8 per cent higher than the ten-year average for the month, according to the Ontario Real Estate Association. Home sales for the first nine months of the year were up 28 per cent compared to the same period last year.
Here’s where things get ugly for Ontario homebuyers. The number of new listings was down 25.6 per cent versus last September, and was the lowest figure recorded for the month in more than a decade. Active residential listings were down 38.9 per cent year-over-year and are at their lowest point in more than 30 years.
There’s only one direction prices can move when supply is this low.
The average price of resale homes in Ontario was $887,290 in September, showing a 19.7 per cent annual increase. Three areas of the province saw the average price increase by even more:
In the Greater Toronto Area, the average price of detached, semi-detached and townhouse properties all increased by more than 20 per cent . The average price of a detached home in Toronto’s 416 area code hit $1.8 million.
Canada’s second-busiest real estate market experienced a similar month as Ontario. According to data from the British Columbia Real Estate Association , sales were down 19.9 per cent year-over-year in September. The average price still managed to increase by 14 per cent, hitting $913,471 by month’s end.
Active residential listings were down a colossal 36.8 per cent compared to September 2020. In the Fraser Valley and Victoria, two of the province’s hottest markets, residential listings were down by more than 50 per cent.
Prices saw the most movement in Chilliwack, Powell River and Vancouver Island. The average price in each area increased by more than 27 per cent annually.
Prices in B.C.’s largest cities, Vancouver and Victoria, continue rising, but at a less scorching pace. The average price in Greater Vancouver, $1,174,305, was 6.5 per cent higher than a year ago, while Victoria’s, $889,515, showed a 5.8 per cent increase.
Sales in Quebec are also being suppressed by evaporating supply, but buyers there have a ways to go before they’re paying prices in the same ballpark as those in Ontario and B.C.
Active listings for single-family homes and condos were both down by more than 25 per cent in September, which helped drive the price of each asset class higher. The median price of a detached home rose 16 per cent to hit $365,000. The median condo price increased 17 per cent to $335,000.
While prices in Quebec City fall well within the provincial averages, those in Montreal can be considerably higher. The median price of a detached home in Montreal was $504,500 in September; that of condos was $365,000.
Things are much more stable on the Prairies, where market softness from 2015 until 2020 has left a fair amount of excess housing stock for buyers to choose from.
The most active province of the bunch in September was Alberta . A rocking Calgary market helped increase provincial activity a healthy 8.7 per cent year-over-year, with the average detached price increasing 6.2 per cent to $473,541.
Sales dipped between 12 and 20 per cent in Regina, Saskatoon and Winnipeg, with the average price in Regina ($335,656) rising by five per cent and Winnipeg’s ($318,400) increasing by 11.5 per cent. Saskatoon’s average price dropped by three per cent to $327,104.
Even though Atlantic Canada was late to the real estate bacchanal, housing markets out east are getting their share of the action:
This article provides information only and should not be construed as advice. It is provided without warranty of any kind.