Last month’s Metro Vancouver home sales stayed below 10-year seasonal averages, according to the Greater Vancouver Realtors (GVR). The region’s residential sales totalled 1,904, marking a 17.1 per cent decline from the 2,296 sales the year before and 26 per cent less than the 10-year seasonal average (2,572).

“From a seasonal perspective, August is typically a slower month for sales than June or July. In this respect, this August has been no different,” Andrew Lis, GVR’s director of economics and data analytics explains. “With that said, sales remain in a holding pattern, trending roughly 20 per cent below their 10-year seasonal average, which suggests buyers are still feeling the pinch of higher borrowing costs, despite two recent quarter percentage point reductions to the policy rate this summer.” 

Buyers’ hesitancy + new listing activity result in accumulated inventory & balanced market conditions

4,109 new listings for detached, attached and apartment properties were on Metro Vancouver’s MLS in August, a 4.2 per cent increase from the 3,943 properties listed the year before. Despite the increase, the total was 1.7 per cent below the 10-year seasonal average (4,179).

The total number of properties listed for sale stands at 13,812, a 37 per cent rise from August 2023’s total of 10,082 and 20.8 per cent above the 10-year seasonal average of 11,432.

For all property types, the sales-to-active listings ratio in August was 14.3 per cent. By category, it was 9.6 per cent for detached homes, 18 per cent for attached homes and 17.2 per cent for apartments.

“Buyers’ hesitancy to enter the market, paired with new listing activity on the part of sellers that is in line with historical averages, has allowed inventory to accumulate for a number of months and has moved the market firmly into balanced conditions,” Lis notes.

He says that with the Bank of Canada reducing the policy rate this month by another quarter percentage point, and with September being a time that often sees more seasonal sales, the fall market should bring more buyers off the sidelines.

Where prices landed

The composite benchmark price for all residential properties in Metro Vancouver currently sits at $1,195,900, 0.9 per cent less than August 2023 and 0.1 per cent less than July 2024.

By property type, detached home sales reached 509, a 13.9 per cent decline from 591 the year before. Apartment sales totalled 1,012 in August, 20.3 per cent less than the 1,270 sales in August 2023 and attached homes totalled 370 sales last month, 12.3 per cent less than the 422 sales of the prior year.

Review the full report here.

I’m always reluctant to draw any conclusions about housing markets based on seasonally low data. More specifically, July-August and December-January typically have suppressed sales volume, so using them to guide decision-making can lead us astray.

Source: TRREB

With that being said, there are a few key things to be mindful of in Toronto Regional Real Estate Board (TRREB)’s most recent Market Watch release:

Home sales are down by 5.3 per cent compared to August last year. This is relatively in line with the declines we’ve seen each month in 2024. As well, homes are taking much longer to sell (40-57 per cent increase in days-on-market).

As a result, inventory continues to accumulate in the absence of absorption, so active listings are up significantly (46.2 per cent). Nominal prices are down slightly (0.8 per cent), so when adjusted for current inflation, real house prices are down over 3.0 per cent since last year.

The fourplex pump

Source: TRREB

When you unpack these data points a little further, you can get a better understanding of the market.

Some things stand out here:

1. Area code 416 detached home sales is the only category posting a YoY increase in number of units sold in August, up 8.3 per cent. It’s also the only category posting a YoY increase in price, up 3.2 per cent.

2. Area code 416 condominiums and townhouses have both seen double-digit drops in volume.

Presumably, the municipality’s upzoning of residential neighbourhoods in Toronto to four units has had some positive impact. A floor on area code 416 detached homes would be established by the last buyer in the market — an investor looking to tear down the home and rebuild a multiplex there. Their output value has now gone from one or two units to four units, as a purchaser can now build a fourplex on detached lots.

In the 905 area code, detached sales appear to be resilient, but less optimistic than in 416. The 905 area code’s detached sales number saw a 3.3 per cent decrease.

The cooling condominium market

Condominium units are a very different story from the detached market. We’ve been hearing alarming reports of condominium volume piling up, with product exceeding 12 months of inventory at some periods.

Condominium apartment sales continue to decline, currently at a rate of 11.4 per cent across the GTA compared to August of last year. This decline is reflected further in the preconstruction condominium sales market, where sales are 50 to 75 per cent below the long-term average.

Declining rents and increasing interest rates have created a difficult cash flow scenario for condominium investors. As a result, many are looking to offload assets, and very few are looking to purchase these assets.

Source: TRREB

Pricing

Prices are down across the board on TRREB. Notably, beyond condominiums, recipients of the pandemic’s urban exodus are seeing a steeper recoil from peak pricing, which seems to correlate heavily with the magnitude of price increases during the exodus.

Source: TRREB

Moving forward

With another 25 basis point rate cut from the Bank of Canada, some pressure has been eased for financial stress on certain sellers. Fixed rates are declining, so there’s a little more light at the end of the tunnel for those facing a steep mortgage payment increase upon renewal in 2025 and 2026.

The bigger question is when interest rate cuts will have a material impact on bringing purchasers back to the market. So far, the impact of 75 bps rate cuts has been relatively muted, as the weight of financial stress seems to outweigh the benefit of lower rates.

Last month, Calgary’s market continued to move from the strong seller’s market conditions of the spring, the Calgary Real Estate Board (CREB) reports. More inventory and fewer sales brought months of supply to more than two months, a level unseen since 2022.

“As expected, rising new home construction and gains in new listings are starting to support a better-supplied housing market,” says Ann-Marie Lurie, chief economist at CREB. “This trend is expected to continue throughout the remainder of the year, but it’s important to note that supply levels remain low, especially for lower-priced properties. It will take time for supply levels to return to those that support more balanced conditions.”

More inventory driven by higher-priced properties; fewer sales thanks to lower-priced properties

Last month’s inventory reached 4,487 units, 37.3 per cent higher than the year prior but almost 25 per cent lower than long-term trends for August.

Higher-priced properties mostly drove these gains, with more new listings and less sales, at 2,186 — 19.5 per cent less than 2023’s record high yet 17 per cent higher than long-term averages for August. Sales declines were for homes priced below $600,000.

August’s unadjusted residential benchmark price was $601,800, 6.3 per cent higher than last year and slightly lower than last month. The average benchmark price rose by 9.0 per cent year-to-date.

Detached homes

Compared to a year ago, detached home sales fell by 14 per cent. August saw 2,011 detached homes in inventory, with over 85 per cent priced above $600,000, helping push the months of supply up to nearly two months.

August’s unadjusted detached benchmark price was $762,600, just under last month but over 9.0 per cent higher than last year.

Semi-detached homes

For semi-detached properties, the region saw 297 new listings and 172 sales, with a sales-to-new-listings ratio drop to 58 per cent that supported increased inventory and a months of supply jump to nearly two months.

This category’s August unadjusted benchmark price was $681,200, a drop from July but almost 10 per cent higher than last year.

Row homes

Last month, new listings for row homes priced above $400,000 added to year-to-date growth of about 16 per cent, while slower sales over the past quarter also boosted inventory gains. There were 660 row home units available, a 75 per cent increase over particularly low levels reported last year.

This category’s unadjusted benchmark price in August was $461,700, slightly lower than last month but over 12 per cent higher than the year prior.

Apartment condominium homes

August’s new listings of apartment condominium homes reached 1,001, a record high for the month. This was paired with declining sales, which caused the sales-to-new-listings ratio to fall to 60 per cent and inventories to rise to 1,476 units, with months of supply to rise to about two and a half months.

The month’s unadjusted benchmark price was $346,500, similar to July’s and almost 16 per cent higher than 2023’s prices.

Review CREB’s full reports for the city and region.

Last week, Greater Vancouver Realtors (GVR) released its 2024 second-half (H2) housing forecast, which reviews new dynamics impacting the market along with economic trends that informed the first half of 2024.

Here are some highlights of what GVR expects for the second half of the year.

Sales and price forecasts

This year, GVR sales and price forecasts are almost exactly on target, but market balance has shifted from favouring sellers at the year’s start towards more balanced conditions.

GVR’s 2024 first-half (H1) forecast predicted that sales across Greater Vancouver would jump by about 8.0 per cent compared to 2023 (28,250 by year-end).

Sales from January to July this year totalled 16,227, with the prediction being 16,256 — a 0.18 per cent difference. GVR is keeping its year-end sales prediction as-is.

So far, aggregate price metrics have shown slight increases as the H1 forecast predicts, driven by steady sales combined with near-record-low inventory levels at 2024’s start. With these levels rising throughout the past few months, most aggregate price metrics are trending sideways or slightly downward.

Yet the median differential between the list price and sale price for all GVR properties has trended at a close to 2.0 per cent discount since the start of the year.

In the near term, GVR’s outlook for the year’s second half is a balanced market that continues to support modest price appreciation by year-end. The organization keeps its outlook of price appreciation in the 1.0-4.0 per cent range across market segments to year-end.

Inventory

As sellers stay keen to list their properties, Greater Vancouver hasn’t seen such inventory level highs since 2019. Compared to 2023 levels, this boost has been the biggest surprise in H1 data.

The main drivers behind this trend are a result of steady demand from buyers along with higher-than-expected new listing activity levels, which isn’t of concern to GVR right now. The sense is that increased inventory might be positive, especially for buyers, as it signals a return to more balanced market conditions.

Though sales are below their 10-year average, they’re not the lowest seen before and this isn’t a new trend. Newly listed properties are meeting or exceeding historical averages, which has resulted in accumulated inventory thanks to below-average sales.

GVR found that many factors have contributed to the new listing activity boost, including the fact that early 2023 had lower-than-normal new listing activity and sellers who waited to sell then are possibly doing so this year.

Interest rate cut impacts

GVR says that while additional reductions to the Bank of Canada’s policy rate are expected this year, it may take longer to see increased buyer demand.

This is suggested by the fact that while the H2 forecast favours another 50-basis point reduction to the policy rate, buyers showed a lack of response to the 50-basis point reduction in H1.

Review the full H2 forecast here.

Recently, the Home Construction Regulatory Authority (HCRA) revoked Mariman Homes’ license to build and sell homes in Ontario. This is the strictest action the authority can take against a licensed builder.

What happened

Due to complaints from purchasers, the HCRA suspended the Hamilton builder’s license last December. An inspection showed it had entered into agreements of purchase and sale for 108 homes without proper authorization and enrollment in Tarion’s warranty program (a requirement to legally build and sell homes in Ontario).

Also, the HCRA discovered that Mariman had allowed its creditors to seek improper price increases from purchasers and failed to hold the deposits it received in trust (as was required under the company’s purchase agreements).

To minimize the impact on purchasers, the HCRA gave Mariman the chance to enroll the homes and prove it could complete construction within the timeframe and price it had committed to. This was done to find a solution that would still allow purchasers to obtain their homes.

Unmet commitments result in revoked license and fines of $400,000

When Mariman was unable to satisfy its commitments, the HCRA revoked its license and ordered it to pay $400,000 in administrative penalties. In the end, the company sold over 100 homes it was not authorized to sell.

“Given these infractions, including a history of financial mismanagement, the HCRA has revoked Mariman’s license to build and sell new homes,” says Wendy Moir, chief executive officer and registrar of the HCRA. “This builder’s past and present conduct raises serious doubts about its ability to operate their business lawfully and with honesty and integrity.”

A ‘textbook example of why builders and sellers must go through the licensing and enrollment process’

Moir stresses, “This is a textbook example of why builders and sellers must go through the licensing and enrollment process. These standards are designed to ensure builders have the competency and financial capability to operate a business before they collect money from purchasers.”

Mariman is currently undergoing receivership proceedings in the Ontario Superior Court of Justice. Tarion is monitoring the situation for any impact on deposit protection coverage for purchasers.

Results from the Canadian Home Builders’ Association (CHBA) 2024 Q2 Housing Market Index (HMI) showed even worse builder sentiment than the previous quarter across key Canadian regions.

CHBA reports that new home sales figures indicate housing starts activity won’t materially pick up in the near future. What’s particularly concerning is the record HMI lows in Ontario (11.6/100 for single and multi-family dwellings) and British Columbia (17.8/100 for single-family and 32.5/100 for multi-family dwellings) combined with the large affordability challenges and need for more supply these provinces face.

The association also points out that the slowdown’s full effects are yet to be felt in housing starts because of long building timelines, especially for multi-family structures.

Over 60% of builders expect half the housing starts this year as were in 2023

Nationally, 48 per cent of HMI respondents stated they’re building fewer units than they otherwise would have as a result of challenges with mortgage qualifications for their customers, while 22 per cent stated that lack of sales has led to the cancellation of projects. 61 per cent of respondents expect an average of half the number of housing starts this year compared to 2023.

“The slowly dropping interest rate environment is not enough to counter the restrictive mortgage rules contributing to buyers’ inability to enter the market with today’s house prices. Canada continues to need both more supply and changes to mortgage rules to help drive the construction of that supply,” says CHBA CEO Kevin Lee.

‘Much more policy change is needed to turn the tides and get housing supply momentum underway’

Lee continues: “If buyers can’t get better access to mortgages, and municipalities don’t lower development taxes and address the barriers to home building, the chronic undersupply of homes will only get worse in many areas of the country, which will drive up house prices again. Much more policy change is needed to turn the tides and get housing supply momentum underway.”

‘Every level of government must tackle this problem from every angle’ — what’s still needed?

As of August 1, first-time buyers of new construction homes can access 30-year amortizations on insured mortgages, which Lee describes as an “important action to help the next generation of well-qualified individuals into the market.” He explains that more relief on the mortgage front is still needed though, through means like expanding 30-year amortizations on all insured mortgages for new construction.

“We also need revisions to the mortgage stress test to make it dynamic and lower it at higher rates. Every level of government must tackle this problem from every angle, in concert,” he stresses.

Get more information on CHBA’s HMI, including detailed methodology and key takeaways.

In July, Ottawa’s housing market saw a significant uptick in activity, with 1,241 homes sold through the MLS system, the Ottawa Real Estate Board (OREB) reports. This marks a 13.6 per cent increase from July 2023, signaling a strong month for sales.

However, despite this surge, home sales were still 7.1 per cent below the five-year average and 8.8 per cent below the 10-year average for the month of July. Year-to-date, total home sales reached 8,349 units in July, a 5.5 per cent increase compared to the same period in 2023.

Encouraging market activity but Ottawa needs supply-side action

“As the market pace typically slows in the summer, July’s activity is encouraging and could be a sign of more gains ahead,” says OREB president Curtis Fillier. “Buyer confidence is slowly but surely catching up while sellers continue to add a steady stream of new listings. Of course, the extent to which that translates into transactions depends on the type of properties and price points available in our communities as supply and affordability issues persist.”

“It’s too early to tell, but recent policy developments could be a boost,” says Fillier. “Two consecutive interest rate cuts by the Bank of Canada, coupled with the federal government’s introduction of 30-year amortization periods on mortgages for first-time homebuyers purchasing newly built homes, will help some buyers. However, these are demand policies, and Ottawa — as well as many cities across the country — needs action on the supply side.”

Housing supply growth challenges and OREB’s response

The Bank of Canada’s Monetary Policy Report highlighted ongoing challenges in housing supply growth, pointing to municipal zoning restrictions and high development fees as significant barriers. Recent Ontario government data underscores these challenges, showing that Ottawa has built 1,593 homes out of its 12,583 target for 2024.

In response, OREB and its member realtors continue to advocate for solutions to the housing crisis, including allowing four units per lot and reducing high development fees.

Source: OREB

July prices

The overall MLS Home Price Index (HPI) composite benchmark price was $648,900 in July, a slight increase of 0.1 per cent from July 2023.

The benchmark price for single-family homes was $734,700, down 0.1 per cent year-over-year. Townhouse/row units saw a 3.4 per cent increase, with a benchmark price of $506,100. The benchmark apartment price was $422,800, a 0.9 per cent decrease from the previous year.

The average price of homes sold in July 2024 was $679,610, down 2.1 per cent from July 2023. Year-to-date, the average price stood at $681,082, up 1.0 per cent from last year.

July inventory & new listings

July 2024 also saw a 17.1 per cent increase in new residential listings, with 2,231 new listings hitting the market. This figure was 6.3 per cent above the five-year average and 6.9 per cent above the 10-year average for the month of July.

Active residential listings reached 3,480 units by the end of July, marking a 37 per cent increase from the previous year. This inventory level was 50.6 per cent above the five-year average but 2.3 per cent below the 10-year average for July. The months of inventory rose to 2.8 months in July, up from 2.3 months during the same time in 2023.

Review the full report here.

Despite gaining momentum in June, after the Bank of Canada’s rate cut that month, activity in Canada’s housing market paused in July.

Last month, home sales dipped 0.7 per cent on a month-over-month basis, reversing a small portion of June’s post-first rate cut gains. There’s a likelihood of further rate cuts in the next interest rate decision with the pace of future policy likely easing.

Expectations of further policy easing and more rate cuts to come

It’s clear that we may take a while to return to the COVID era when home sales peaked in January 2021 — their highest peak since January 2009, reaching approximately 64,000 sales. Despite the 0.7 per cent drop in sales, there’s a positive side to this as sales remain close to the recorded level from June.

But after the Bank of Canada announced a second rate cut of 4.5 per cent on July 24, there have been growing expectations of further policy easing with markets anticipating additional cuts as we head into fall.

It’s good news that despite the slight dip in July, our actual monthly activity was still 4.8 per cent higher than in July 2023. As well, the number of newly listed properties increased by 0.9 per cent month-over-month with Calgary seeing a notable boost in supply.

The Home Price Index rose by 0.2 per cent from June to July, although prices remained 3.9 per cent lower than in June 2023. The national average sale price was virtually unchanged — dipping just 0.2 per cent year-over-year to $1,667,317.

A balanced market with potential for continued downward price pressure — fall will be oversupplied

Canada’s market is pretty much balanced at this point, steadily at just over four months of inventory and just over 50 per cent sales-to-new-listing ratios. This can result in continued downward pressure on prices.

All of this is correlated to the fact that national new listings inventory continued to climb in July, which is typically considered one of the slowest periods for new listings. Looking ahead into fall, there will be an oversupplied market.

Alberta and Ontario: Stabilized

The biggest price increase was observed in Edmonton and Hamilton-Burlington, whereas Calgary and Toronto both witnessed the largest average price increase, which levelled one another out. This has resulted in Alberta and Ontario stabilizing in terms of the provincial average home sales price trend over the last several months.

Interestingly enough, despite having the biggest decrease in average price, Calgary had the most number of properties listed, which contributed to the increase of 0.9 per cent of the national average. 

Source: Wowa.ca

Keeping an eye on these developments will be critical for understanding what’s in store for the industry this fall and beyond, and for helping us advise our clients well.

After recently announcing that Tim Hudak decided not to continue in his role as CEO, the Ontario Real Estate Association (OREA) says it has started a comprehensive internal and external search to identify Hudak’s permanent successor in leading the association. Hudak’s term ended on August 2.

In the meantime, the board has appointed Sonia Richards, chief of staff & board strategy, as interim CEO, effective August 12.

Richards’ ‘substantial expertise in leading critical operational aspects of our organization will serve OREA well’

“On behalf of the OREA Board of Directors, and all of our employees, members, member boards and stakeholders, I want to thank Tim for his many contributions to OREA throughout his leadership over the past seven years,” says Rick Kedzior, president of the OREA Board of Directors.

“Tim’s leadership has been critical to the progress OREA has made in streamlining Ontario’s real estate sector and positioning the association for the next phase in its advancement. As the board progresses in its search for Tim’s successor, I am confident that Sonia’s experience as a seasoned industry leader, and her substantial expertise in leading critical operational aspects of our organization, will serve OREA well in her expanded role as interim CEO.”

Kedzior, who Richards will report to, goes on to mention they will work closely with support from their leadership team, and that he looks forward to working with the board during the candidate search process for Hudak’s successor.

OREA notes that beyond her extensive expertise, Richards is a respected leader, mentor and organizational champion.

Richards’ interim role going forward 

In her role as interim CEO, Richards will be responsible for managing the day-to-day functions of the association, in addition to her existing responsibilities as chief of staff & board strategy. 

These functions will include providing fiscal oversight, planning and analysis of OREA business activities as well as program management, member board strategy, member relations, corporate strategy and business planning functions.

Photo: LinkedIn.com

Saskatchewan’s housing market continued its strong performance in July, with the Saskatchewan Realtors’ Association (SRA) reporting 1,667 sales — a 7.0 per cent increase from the previous year and over 20 per cent above the long-term 10-year average. This marks the thirteenth consecutive month of above-average sales, contributing to year-to-date sales that are 10 per cent higher than July 2023 and 19 per cent above the 10-year average.

Although the year-over-year increase in new listings was modest, it had little impact on overall inventory, which remains 20 per cent lower than the previous year and over 40 per cent below long-term trends.

Supply constraints & strong demand placing upward pressure on prices

“Strong housing demand continues to support above-average monthly sales levels, preventing any significant inventory relief in many markets across the province,” says SRA CEO, Chris Guérette. “Limited supply choice, specifically in the more affordable segment of the market, is likely preventing even stronger sales activity in our province.”

In July, the province reported a residential benchmark price of $344,800, up from $343,300 in June and nearly 5.0 per cent higher than July 2023. Home prices increased across all property types, with year-over-year gains ranging from over 4.0 per cent for detached homes to 11 per cent for row/townhouse properties.

“With just over three months of inventory across the province — below two in some of our larger centres — it remains a challenging time for prospective buyers right now,” notes Guérette. She explains that supply constraints combined with strong demand are placing upward pressure on prices, as shown in record benchmark prices in some communities for the second consecutive month.

Province-wide sales above July’s 10-year average, despite declines in some regions

Despite slight sales declines in some regions, all provincial areas reported monthly sales figures above the 10-year average in July.

Year-to-date sales improved province-wide except in the Northern region, with the most significant growth in the Regina-Moose Mountain and Swift Current-Moose Jaw areas. The Saskatoon-Biggar region continues to report the tightest market conditions, with just 2.19 months of supply in July.

Price trends

Home prices rose across many economic regions in Saskatchewan in July, with the most significant gains in the Saskatoon-Biggar (7.0 per cent year-over-year) and Swift Current-Moose Jaw (5.0 per cent) areas. Other cities, including Regina, Estevan, Weyburn and Moose Jaw, also saw year-over-year price increases last month.

Regina

Regina reported 381 sales in July, a 10 per cent year-over-year increase and 26 per cent above the 10-year average.

Strong sales contributed to a 16 per cent gain in year-to-date sales, reaching some of the highest levels ever recorded at this point in the year. Despite a slight rise in new listings, inventory levels remain 43 per cent below the 10-year average. Regina’s benchmark price in July was $318,400, slightly up from $318,100 in June and 0.5 per cent above July 2023.

Saskatoon

Saskatoon saw 520 sales in July, a 5.0 per cent year-over-year increase and over 20 per cent above the 10-year average.

Limited supply continues to restrain even stronger sales in Saskatoon, with inventory levels 50 per cent below long-term trends. The city reported the tightest market conditions in the province, with just 1.60 months of supply. Saskatoon also recorded a new benchmark price high of $406,500 in July, up from $403,500 in June and over 7.0 per cent higher than July 2023.

Review the full report, including by province, city, CMA/CA, economic region and census division.