After two interest rate hikes this summer, housing price growth has slowed across Canada. Supply is rebuilding as sales have slowed, meaning prospective buyers could soon reap the benefits of the increased inventory.
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To find out where buyers and sellers currently have the greatest advantages, Zoocasa analyzed market competition across 34 cities and regions in Ontario by comparing July sales and new listing data for each city. This data was then used to determine the sales-to-new-listings ratio (SNLR) for the month, calculated by dividing the total sales by the number of new listings in each region. The SNLR is used to effectively show the level of demand and supply in each area, and help identify how much competition local buyers face with regard to supply. The SNLR can be broken down into three percentage parameters:
- An SNLR under 40% suggests a buyer’s market: where new listings outweigh and buyers have more options
- An SNLR between 40% and 60% is a balanced market: where demand and supply are balanced
- AN SNLR over 60% means a seller’s market: where demand outpaces supply, benefiting sellers
The Slower Summer Pace is Allowing Supply to Rebuild and Markets to Balance
23 of the markets analyzed sit in a balanced state. This means that although inventory is tight in many of these markets, demand and supply are relatively balanced, however, it does not take into account the sideline buyers that are on the fence. Many of these markets have shifted from the sellers’ market in the last year. North Bay has had the greatest SNLR percentage drop, falling from a sellers’ market (73%) to a balanced one (57%). While sales figures in the region have remained relatively stable, there have been 31.6% more homes listed on the market compared to July of last year.
Many other markets have shown declines from favouring sellers to a more balanced state. Oakville, Newmarket, Toronto, Mississauga, Pickering and Oshawa have all shifted into balanced territory from last year. In each of these GTA markets except Mississauga, prices have also declined in the last month. The recent interest rate hikes have cooled the market somewhat, leading to the decline in SNLR in each.
While markets could become more favourable for potential buyers in the future, only one Ontario market favours those looking for a home right now. Those looking for an affordable option may want to try Niagara Falls. The SNLR in the region is just 39%, with enough homes coming to market to satiate demand, while the average price is a comparably affordable $662,200.
It’s Still a Great Time to Sell, Especially in Prime GTA Markets
There are still a few cities in the province where demand is outpacing availability. Three of those cities have home prices below the national average of $668,754. Sault Ste. Marie, Thunder Bay and Sudbury are all vastly more affordable markets compared to the national average, with the most expensive of those, Sudbury, having an average home price of $473,235. Sault Ste. Marie’s SNLR is 63%, while Thunder Bay sits at 71% and Sudbury at 69%. As homes are more affordable in these cities, demand is likely to continue even in the face of rate hikes and higher mortgage costs, meaning these markets continue to favour the seller.
On the more expensive end, sellers still have the upper hand in Markham, Aurora, Burlington, Whitby and Ajax, where homes cost at least $1,000,000. While prices and home sales have fallen in each of these cities in the last month, the number of listed homes has also fallen, tightening demand and keeping each in the seller-friendly territory.
Whether you’re looking to buy or sell, give us a call and we can guide you through the market conditions in your city.
