Rising interest rates and stricter mortgage requirements have reduced home buyers’ purchasing power, particularly for those at the entry level of our market, the supply of apartment and townhome properties for sale today is unable to meet demand. On the other hand, the detached home market has entered the buyers’ market territory.
This is a market where the fundamentals of a sound pricing strategy need to be understood by sellers. At the same time, potential purchasers should be obtaining mortgage 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.
Ontario – Sales down by 39.5% compared to last year.
Toronto, April 4, 2018 — Toronto Real Estate Board President Tim Syrianos announced that Greater Toronto Area REALTORS® reported 7,228 residential transactions through TREB’s MLS® System in March 2018. This result was down by 39.5% compared to a record 11,954 sales reported in March 2017 and down 17.6% relative to average March sales for the previous 10 years.
The number of new listings entered into TREB’s MLS® System totaled 14,866 – a 12.4% decrease compared to March 2017 and a three% decrease compared to the average for the previous 10 years.
“TREB stated in its recent Market Outlook report that Q1 sales would be down from the record pace set in Q1 2017,” said Mr. Syrianos. “The effects of the Fair Housing Plan, the new OSFI mandated stress test and generally higher borrowing costs have prompted some buyers to put their purchasing decision on hold. Home sales are expected to be up relative to 2017 in the second half of this year.”
The MLS Home Price Index Composite Benchmark was down by 1.5 percent on a year-over-year basis for the TREB market area as a whole. The overall average selling price was down by 14.3% compared to March 2017.
While the change in market conditions certainly played a role, the dip in the average selling price was also compositional in nature. Detached home sales, which generally represent the highest price points in a given area, declined much more than other home types. In addition, the share of high-end detached homes selling for over $2 million in March 2018 was half of what was reported in March 2017, further impacting the average selling price.
“Right now, when we are comparing home prices, we are comparing two starkly different periods of time: last year, when we had less than a month of inventory versus this year with inventory levels ranging between two and three months. It makes sense that we haven’t seen prices climb back to last year’s peak. However, in the second half of the year, expect to see the annual rate of price growth improve compared to Q1, as sales increase relative to the below-average level of listings,” said Jason Mercer, TREB’s Director of Market Analysis.
Ottawa – Buyers Get a Jump on the Spring Market
Ottawa, April 5, 2018 — Members of the Ottawa Real Estate Board sold 1,660 residential properties in March through the Board’s Multiple Listing Service® System, compared with 1,478 in March 2017, an increase of 12.3%. The five-year average for March sales is 1,339. March’s sales included 358 in the condominium property class and 1,302 in the residential property class.
“Inventory continues to fall below normal average, but we are still seeing more sales than last year because listings are not staying on the market,” states Ralph Shaw, President of the Ottawa Real Estate Board. “Properties that are priced well are selling quickly with days on market dropping to an average of 43 days from an average of 54 days on market in March 2017.”
The average sale price of a residential-class property sold in March in the Ottawa area was $447,561, an increase of 8% over March 2017. The average sale price for a condominium-class property was $275,592, an increase of 0.7% from March 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 46% of the market. In addition, the $500,000 to $750,000 market is a price point that is showing robust growth representing 21% of the residential homes sold in March,” Shaw acknowledges.
“In the condominium market, between $175,000 and $274,999 is the most buoyant price point, accounting for 51% of the market. We continue to believe it is due to low-interest rates and the lack of supply of rental inventory pushing renters into the market,” he adds.
“Overall, as a result of the stable pricing in the condominium market and reasonable increases of 8% in the residential market, Ottawa continues to be a healthy and vibrant real estate market,” Shaw concludes.
In addition to residential and condominium sales, OREB Members assisted clients with renting 551 properties since the beginning of the year.
British Columbia – Fewer home sales and listings in the first quarter of 2018
Vancouver, 6 April 2018 — Home buyers and sellers were less active in Metro Vancouver* throughout the first quarter of 2018.
The Real Estate Board of Greater Vancouver (REBGV) reports that residential home sales in the region totalled 2,517 in March 2018, a 29.7% decrease from the 3,579 sales recorded in March 2017, and a 14% increase compared to February 2018 when 2,207 homes sold.
Last month’s sales were 23% below the 10-year March sales average.
There were 6,542 home sales on the Multiple Listing Service® (MLS®) in Metro Vancouver during the first quarter of 2018, a 13.1% decrease from the 7,527 sales over the same period last year. This represents the region’s lowest first-quarter sales total since 2013.
“We saw less demand from buyers and fewer homes listed for sale in our region in the first quarter of the year,” Phil Moore, REBGV president said. “High prices, new tax announcements, rising interest rates, and stricter mortgage requirements are among the factors affecting home buyer and seller activity today.”
There were 4,450 detached, attached and apartment properties newly listed for sale in Metro Vancouver in March 2018. This represents a 6.6% decrease compared to the 4,762 homes listed in March 2017 and a 5.4% increase compared to February 2018 when 4,223 homes were listed.
There were 12,469 homes listed for sale in Metro Vancouver during the first quarter of 2018, a 0.8% decrease from the 12,568 sales over the same period last year. This represents the region’s lowest first-quarter new listings total since 2013.
The total number of homes currently listed for sale on the MLS® system in Metro Vancouver is 8,380, a 10.5% increase compared to March 2017 (7,586) and a 7.1% increase compared to February 2018 (7,822).
“Even with lower demand, upward pressure on prices will continue as long as the supply of homes for sale remains low,” Moore said. “Last month was the quietest March for new home listings since 2009 and the total inventory, particularly in the condo and townhome segments, of homes for sale, remains well below historical norms.”
For all property types, the sales-to-active-listings ratio for March 2018 is 30%. By property type, the ratio is 14.2% for detached homes, 39.9% for townhomes, and 61.6% 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 $1,084,000. This represents a 16.1% increase over March 2017 and a 1.1% increase compared to February 2018.
Sales of detached properties in March 2018 reached 722, a decrease of 37% from the 1,150 detached sales recorded in March 2017. The benchmark price for detached properties is $1,608,500. This represents a 7.4% increase from March 2017 and a 0.4% increase compared to February 2018.
Sales of apartment properties reached 1,349 in March 2018, a decrease of 26.7% compared to the 1,841 sales in March 2017. The benchmark price of an apartment property is $693,500. This represents a 26.2% increase from March 2017 and a 1.6% increase compared to February 2018.
Attached property sales in March 2018 totalled 446, a decrease of 24.1% compared to the 588 sales in March 2017. The benchmark price of an attached unit is $835,300. This represents a 17.7% increase from March 2017 and a two% increase compared to February 2018.
*Editor’s Note: Areas covered by the Real Estate Board of Greater Vancouver include: Whistler, Sunshine Coast, Squamish, West Vancouver, North Vancouver, Vancouver, Burnaby, New Westminster, Richmond, Port Moody, Port Coquitlam, Coquitlam, Pitt Meadows, Maple Ridge, and South Delta.
The real estate industry is a key economic driver in British Columbia. In 2017, 35,993 homes changed ownership in the Board’s area, generating $2.4 billion in economic spin-off activity and an estimated 17,600 jobs. The total dollar value of residential sales transacted through the MLS® system in Greater Vancouver totalled $37 billion in 2017.
Alberta – Housing market inventory on the rise
Calgary, April 2, 2018 – As expected, slow sales this quarter have persisted through March in the City of Calgary. This is not a surprise, after stronger growth in sales at the end of last year following the announced changes to the lending market.
First quarter sales totaled 3,423 units, nearly 18% below last year’s levels and 24% below long-term averages. Easing sales and modest gains in new listings caused inventories to rise and months of supply to remain above four months.
“Economic conditions are slowly improving, but it has not been enough to outpace the current impact of higher lending rates and more stringent conditions,” said CREB® chief economist Ann-Marie Lurie.
“We are entering the most active quarters in the housing market with more inventory, which could create some price fluctuations. However, the improving economy is expected to prevent overall prices from slipping by significant amounts.”
While prices trended down on a quarterly basis, they remained relatively unchanged over last year’s levels due to modest gains in the detached sector offsetting declines in the apartment sector.
The citywide benchmark price for detached product averaged $502,000 in the first quarter. This is slightly lower than the fourth quarter of last year but comparable to levels recorded in the first quarter of last year. In March, the detached price reached $503,800, 3.6% below pre-recession highs, but one% above the lows recorded during the recession.
“The market today is better than what we experienced at the peak of the recession,” said CREB® president Tom Westcott.
“You can find good value if you’re looking to buy a home, and you can also get good value if you’re selling. Being well-informed, in any economic condition, is the key, because there are differences in the market depending on what type of property it is and where it is located.”
Detached market inventories in the first quarter of 2017 were low compared to historical standards. This year, detached inventories have averaged 2,573 units over the first quarter, 10% below first quarter averages recorded during 2015 and 2016.
Spring will have more inventory than last year, slowing progress on price recovery. However, the amount of price adjustment will vary depending on competing supply by location and product type.