The latest property statistics for hot markets are bad news for home buyers

‘There is still high demand chasing an ever smaller number of ads’: CREA

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Here is the hope that the last six months of declining home sales did not give home buyers the false impression that Canada’s real estate market has cooled. It’s still historically hot.

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Home sales in September showed a modest increase from month to month, according to data from the Canadian Real Estate Association. Despite only an increase of 0.9 per cent. the increase was the first since March.

At this point in Canada’s seemingly inexhaustible real estate boom, with the number of homes on the market scraping the bottom, any increase in sales is almost miraculous. But that does not mean that conditions have improved for buyers.

If anything, they just get worse.

The national image

Last month, home sales in Canada fell by 17.5 percent compared to September 2020. But demand is not slowing. In fact, CREA says it was the second-busiest September ever.

Fewer sales are not always the result of buyers leaving the market. In the case of Canada, they just have far fewer properties to bid on than they had a year ago.

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“There’s still a lot of demand chasing an ever smaller number of listings, so this market remains very challenging,” CREA President Cliff Stevenson said in a statement.

One statistic to keep in mind is the ratio of sales to new ads, which is a solid indicator of supply-demand dynamics. A balanced market is typically in the range of 40 percent sales to 60 percent new ads, with 60 percent and above for listings indicating a seller’s market.

In September, Canada’s sales-to-new ad ratio hit 75.1 percent, meaning buyers bought more than three-quarters of new ads at the end of the month.

It is therefore no surprise that the national average price of homes sold in September – $ 686,650 – was 13.9 percent higher than a year ago.

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Regional highlights

Ontario

Sales in Ontario fell 20.8 percent compared to September 2020, but it was still 11.8 percent higher than the ten-year average for the month, according to the Ontario Real Estate Association. Home sales in the first nine months of the year increased 28 percent compared to the same period last year.

This is where things get ugly for home buyers in Ontario. The number of new listings fell 25.6 percent compared to September last year, and it was the lowest figure recorded for the month in more than a decade. Active housing lists fell 38.9 percent year-on-year and are at their lowest point in more than 30 years.

There is only one direction, prices can move when supply is so low.

The average price of resale homes in Ontario was $ 887,290 in September, showing an annual increase of 19.7 percent. Three areas in the province experienced the average price increase even more:

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  • Western Ontario (Windsor, Chatham-Kent, London, Sarnia): 27.4 percent ($ 585,298)
  • Northeastern Ontario (Barrie, Kawartha Lakes, Muskoka, Peterborough): 24.1 percent ($ 761,102)
  • Southern Ontario (Brantford, Hamilton-Burlington, Niagara, Guelph): 20.3 percent ($ 774,626)

In the Greater Toronto area, the average price of detached, semi-detached and townhouses rose by more than 20 percent. The average price of a detached house in Toronto area number 416 hit $ 1.8 million.

British Columbia

Canada’s second-busiest real estate market experienced a similar month as Ontario. According to data from the British Columbia Real Estate Association, sales fell 19.9 percent from the year before in September. The average price still managed to rise by 14 percent and reached $ 913,471 at the end of the month.

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Active housing inventories fell by a whopping 36.8 percent compared to September 2020. In Fraser Valley and Victoria, two of the province’s hottest markets, housing profiles fell by more than 50 percent.

Prices saw the most movement in Chilliwack, Powell River and Vancouver Island. The average price in each area increased by more than 27 percent annually.

Prices in BC’s largest cities, Vancouver and Victoria, continue to rise, but at a less burning pace. The average price in Greater Vancouver, $ 1,174,305, was 6.5 percent higher than a year ago, while Victoria’s, $ 889,515, showed an increase of 5.8 percent.

Quebec

Sales in Quebec are also being suppressed by evaporative supply, but buyers who have a way to go before paying prices in the same ballpark as those in Ontario and BC

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Active ads for single-family homes and condominiums both fell by more than 25 percent in September, which helped drive the price of each asset class higher. The median price of a detached house rose 16 percent to reach $ 365,000. The average condominium price rose 17 percent to $ 335,000.

While prices in Quebec City fall well within the provincial averages, prices in Montreal can be significantly higher. The median price for a detached house in Montreal was $ 504,500 in September; the cooperative apartments were $ 365,000.

The prairies

Things are much more stable on the prairies, where the softness of the market from 2015 to 2020 has left a lot of excess housing stock for buyers to choose from.

The most active province in the herd in September was Alberta. A swaying Calgary market helped boost provincial activity by a healthy 8.7 percent year-on-year, with the average detached price rising 6.2 percent to $ 473,541.

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Sales fell between 12 and 20 percent in Regina, Saskatoon and Winnipeg, with the average price in Regina ($ 335,656) up five percent and Winnipegs ($ 318,400) up 11.5 percent. Saskatoon’s average price fell three percent to $ 327,104.

Atlantic Canada

Although Atlantic Canada came too late to the real estate trade, the housing markets in the east get their share of the action:

  • New Brunswick set a new activity record in September, with sales 32.9 percent higher than the ten-year average for the month. The provincial average price, $ 262,200, was 31.1 percent higher than the year before.
  • Nova Scotia has just completed the second-busiest September in history, driving the average price of homes sold to $ 356,757.
  • A historic increase in new ads helped make the Prince Edward Islands market somewhat more accessible to buyers. The average price still managed to rise by 13 percent year-on-year to reach $ 337,801.
  • The Newfoundland and Labrador market broke its sales record for September and had its second-highest monthly sales total in history. The benchmark price for single-family homes in the province – $ 325,000 – was 12.3 percent higher than a year earlier.

This article is for information only and should not be construed as advice. It is delivered without warranty of any kind.

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