The fall real estate market is typically a busy one – those looking to buy or sell tend to make a serious play before the snow flies, as cooler temperatures and the holiday season put a freeze on market activity. However, the September numbers from Canadian Real Estate Association reveal the usual back-to-school buying boom was considerably subdued this year, due to fewer sales in Canada’s largest markets.
While seasonally adjusted activity nudged 2.1 per cent higher from August, sales were down year over year in three quarters of all local markets, dropping 11 per cent from 2016, and 12 per cent from this year’s March peak. However, benchmark prices rose in all of the 13 of CREA’s tracked MLS markets – the first time in seven years – increasing 2.8 per cent to a national average of $487,000.
But while prices are on the rise, they’re doing so at a slower pace than before, mainly due to softening demand for houses (traditionally the priciest home type). Condos saw the greatest price increase at 19.8 per cent, followed by townhouses (+13.5 per cent), one-storey detached homes (+7.9 per cent), and two-storey detached homes (+7.2 per cent).
Related Read: GTA Home Sales Fall 35%: TREB
INFOGRAPHIC: Canadian Real Estate Sales & Prices – September vs. August 2017
|City||September 2017 Average Price||September 2016 Average price||% Change|
|Saint John (NB)||$174,665||$179,350||-2.6%|
|St. John’s (NFLD)||$297,485||$296,179||0.4%|
A Stabilizing Market?
CREA’s analysts say that while this could hint at a better balance nationally, it’s too soon to be optimistic, given pending mortgage changes that could impact affordability.
“National sales appear to be stabilizing. While encouraging, it’s too early to tell if this is the beginning of a longer-term trend,” stated CREA President Andrew Peck.
Said Chief Economist Gregory Klump, “Further tightening of federal regulations aimed at cooling housing markets in Toronto and Vancouver risks creating collateral damage in markets elsewhere in Canada. It also jeopardizes Canadian economic growth, which is already showing signs of fading.”
Balanced Conditions In Most Markets
Supply improved for buyers across Canada last month, with new listings up by 5 per cent, following a three-month decline. As new homes coming to market outpaced sales, the national sales-to-new-listings ratio fell to 55.7 per cent – firmly in balanced territory, though leaning slightly more toward buyer’s market conditions compared to August’s 57.7-per-cent ratio. This was the case in two-thirds of all markets, including Greater Toronto, with a ratio of 56.1 per cent.
While the ratio of new listings to sales can effectively gauge how buyer-friendly a market is, it also illustrates how quickly conditions can fluctuate; the GTA’s September ratio is a considerable recovery from June, when – in the immediate aftermath of the Ontario Fair Housing Plan’s implementation – it plunged below 40 per cent, flipping the market into buyer’s territory. It’s also a large decline from the strong seller’s conditions experienced last September, when the ratio sat at 71 per cent, showing how rapidly prospects can change for buyers in the course of a year.
Inventory – the amount of time it would take to completely deplete the supply of homes for sale – remained fairly flat nationally at five months, though this varies widely in regional markets. The rush of homes that came to market in the spring and summer is still evident in the Greater Golden Horseshoe, at 2.4 months – “up sharply” from its all-time low 0.8 months.