With winter officially behind us, the real estate landscape becomes more active, marking the onset of the busy Canadian spring market. Yet, before jumping into real estate ventures, it’s essential to understand the dynamics of the specific area you’re considering including which markets are favouring buyers, sellers, or are balanced.
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We’ve analyzed February 2024 data from the Canadian Real Estate Association, focusing on the sales-to-new-listings ratio (SNLR) in 27 major markets nationwide. This data was then used to determine the sales-to-new-listings ratio (SNLR) for February, calculated by dividing the total sales by the number of new listings in each city. The SNLR indicates the level of demand and supply in each area and can thus help local buyers and sellers determine local market conditions.
An SNLR under 40% suggests a buyer’s market where new listings outweigh sales and buyers have more choice.
An SNLR between 40% and 60% is a balanced market where demand and supply are at similar levels.
An SNLR over 60% suggests a seller’s market where demand exceeds supply and sellers have the advantage.
The Spring Shift: Exploring a Balanced Real Estate Landscape
Out of the 27 major markets that we analyzed, none of them are currently favouring buyers. This is not unusual as last spring, none of the markets we studied favoured buyers either. Moreover, during winter 2023, there were balanced markets in the Niagara Region, Greater Toronto, Hamilton-Burlington, and Victoria.
However, five markets, including Gatineau, Quebec, Newfoundland & Labrador, Ottawa, Hamilton-Burlington, and Kitchener-Waterloo in Ontario, have transitioned into a balanced market.
On the other hand, this spring there are two markets worth noting. In Edmonton, there has been a transition from a balanced market to a seller’s market, indicating increased interest in buying compared to the previous year. Meanwhile, Gatineau experienced the most significant drop, with a 17% decrease in the shift towards a balanced market.
The average price for a home in Edmonton is now $398,960, a significant increase of 12% compared to last year. Similarly, Gatineau home prices have also increased by 5%, with the average home reaching $472,375.
It’s important to highlight that home prices in Edmonton and Gatineau are well below the national average home price of $685,809, making these markets more affordable than other Canadian markets.
Entering Equilibrium: The Resilience of the Balanced and Seller’s Market
There are 11 balanced markets where the supply of homes matches the demand, meaning the number of properties for sale equals the number of people looking to buy. The lowest SNLR rate is in the Niagara Region at 45%, followed closely by Greater Vancouver at 46% and Victoria at 47%.
Likewise, there are also 11 seller’s markets, characterized by a scarcity of housing or an abundance of potential buyers compared to available homes.
Making the Most of Seller-Friendly Markets
The top three seller-favorable markets in the country are Quebec CMA, with the SNLR reaching 84%, 80% at Saint John, NB, and 79% at Halifax-Dartmouth.
Despite remaining below the national average, the cost of homes in these three markets have still increased.
In Saint John, the average price of a home increased to $303,271, which is a whopping 21% increase compared to last year. Quebec CMA prices reached $384,430, which is an 11% year-over-year increase, while Halifax-Dartmouth made a more moderate 4% increase to an average of $561,454.
Seeing the possibility of a higher return on investment may motivate sellers to list their properties. Yet given the stabilization of the Bank of Canada’s rates, buyers in these areas might adopt a more cautious “wait and see” approach before purchasing.
If you’re interested in buying or selling this spring, give us a call! Our agents will help you find the perfect home.
