Metro area home sales plunge as prices trend lower


July 19, 2022 Facebook Twitter LinkedIn Google+ Mortgage News Canada



Ottawa New Listings

Home sales in Canada’s major metro areas are well off of last year’s historic numbers, while home prices continue to trend downward.

In the Greater Toronto Area, home sales were down 41% from last year, while home prices posted a 5.5% monthly decline. In the Greater Vancouver Area, sales were down 35% year-over-year while home prices fell 1.9% month-over-month.

However, average prices are still above year-ago levels for now, with prices in Toronto up 5.3% and prices in Vancouver up 12.4%.

“Another month gave way to another cooling in Canadian housing markets,” wrote RBC economist Claire Fan, noting that Toronto, Vancouver, Montreal, Ottawa and Calgary “all witnessed further declines in home sales in June as markets continue to reverse their pandemic surge following rising borrowing costs with the Bank of Canada pushing interest rates higher.”

“More resilient supply coupled with plunging demand has pushed the sales-to-new listings ratio lower for all regions,” she added. “In fact, all areas except for Calgary have now swung back into a balanced market condition.”

Regional home price roundup

Here’s a look at the May statistics from some of the country’s largest regional real estate boards:

Greater Toronto Area

Sales: 6,474

  • -41% (YoY)
  • -45.6% month-over-month (MoM)

MLS Home Price Index: $1,146,254

New listings: 16,347

Active listings: 16,093

“Home sales have been impacted by both the affordability challenge presented by mortgage rate hikes and the psychological effect wherein homebuyers who can afford higher borrowing costs have put their decision on hold to see where home prices end up,” said Toronto Regional Real Estate Board (TRREB) President Kevin Crigger. “Expect current market conditions to remain in place during the slower summer months.”

Source: Toronto Regional Real Estate Board (TRREB)


Greater Vancouver Area

Sales: 2,444

MLS Home Price Index for all property types: $1,235,900

New listings: 5,256

Active listings: 10,425

“Rising interest rates and inflationary concerns are making buyers more cautious in today’s housing market, which is allowing listings to accumulate,” Daniel John, REBGV Chair.

“We’re seeing downward pressure on home prices as we enter summer in Metro Vancouver due to declining home buyer activity, not increased supply,” he added. “To meet Metro Vancouver’s long-term housing demands, we still need to significantly increase housing supply.”

Source: Real Estate Board of Greater Vancouver (REBGV)


Montreal Census Metropolitan Area

Home Sales: 4,078

Median Price (single-family detached): $570,000

Average Price (condo): $365,000

New listings: 7,152

Active listings: 12,370

“Sales continue to slow down significantly in the Montreal area. In this context, new listings, which have been above the historical average since the month of May, are starting to have an impact on the inventory of properties for sale,” said Charles Brant, director of QPAREB’s Market Analysis Department. “The sharp increase in active listings translates into a slight increase in the time it takes to clear inventory, a first since 2015 across all periods and in all the areas of the region.”

“While market conditions remain very tight in favour of sellers, the next few months will finally usher in a downward trend in overbidding and a winding down of the continuing rise in prices compared to 2021,” he added.

Source: Quebec Professional Association of Real Estate Brokers (QPAREB)


Calgary

Sales: 2,842

Benchmark Price (all housing types): $543,900

New listings: 4,061

Active listings: 5,405

“As expected, higher interest rates are starting to have an impact on home sales. This is helping shift the market toward more balanced conditions and taking some of the pressure off prices,” said CREB Chief Economist Ann-Marie Lurie. “While we are starting to see some transition, it is important to note that in Calgary, year-to-date sales are still at record levels and prices are still far above expectations for the year.”

Source: Calgary Real Estate Board (CREB)


Ottawa

Sales: 1,508

Average Price (residential property): $772,861

Average Price (condominium): $438,977

New Listings: 3,213

“After the frenzy of the past two years, we are witnessing Ottawa’s resale market normalize in 2022 and shift towards the more traditional seasonal ebb and flow cycle. While June transactions do typically taper as many look towards their summer holidays, last month’s sales were at a slower pace than we have seen in well over a decade,” said Ottawa Real Estate Board President Penny Torontow.

“We can likely attribute the decrease in unit sales to economic factors such as rising interest rates and cost of living/inflation,” she added. “Other dynamics could include Buyer fatigue combined with a wait-and-see approach towards home prices, lack of confidence amongst consumers, and perhaps the uncertainty surrounding back-to-work arrangements as a long commute with rocketing gas prices will certainly affect decisions about where to live.”

Source: Ottawa Real Estate Board (OREB)



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