Spring and early summer is one hot time to buy a house. It’s easy for buyers to get around, homes and condos look even more attractive surrounded by greenery and sunshine. As long as you can close a deal in time for the new school year in September, you can often move a house this time of year.
However, sales numbers have been down over the past year nationwide. This is thanks to new mortgage rules that have eliminated 30-year mortgages and high-ratio mortgages (less than 20 per cent down).
But the Canadian market is still very much thriving, and in certain Canadian cities, the hot summer market is more of a scorcher. Let’s see what’s going on in our busiest housing markets.
Toronto: Neighbourhoods Drive Demand
While sales this spring were down around three per cent from last, Toronto is still seeing bidding wars, short turnarounds and sky-high prices. The average home price was $542,174 in May, up 5.4 per cent from last year.
Experts say Toronto’s market is a complex one. While sales are down, prices are still climbing. That’s driven by a lack of good listings in the city, particularly in certain hot downtown neighbourhoods, where people increasingly want to live.
While some houses are sitting on the market in Toronto, solid homes in popular neighbourhoods are being bought quickly, and at record prices.
Meanwhile, condo sales are somewhat on the wane. They’re down 6.4 per cent in the city and 16 per cent in the suburbs. But attractive units in well designed buildings are reselling well and holding their value. Market experts suspect some of the thousands of new buildings in the design phase in the city — the most for any city in North America — will never be built. However, builders got to work on 2,400 new units in the city in May alone.
Calgary: A Boomtown
Hogtown is booming and its real estate prices are too. In May, average single-family home prices hit a record of $521,887, up 4.03 per cent from the year before.
And unlike other cities, there’s no slowdown volume-wise. Sales overall were up 6.85 per cent from last year as both single-family dwellings and condos are selling well.
Calgary’s market overall has had a different ride from many Canadian cities. The market peaked in 2007 and had a correction after 2008 and the economic downtown. The city was overbuilt and somewhat overpriced at the time but after its correction its seen a steady growth in prices and a more moderate number of new builds.
Vancouver: Declining Prices and New Starts
The priciest city in Canada is becoming somewhat less so as Vancouver goes through a bumpy but probably much-needed correction. This once high-flying city has seen a drop in sales volume and in prices.
The composite benchmark price for all properties was $598,400 in May, down 4.3 per cent from a year before. Sales volumes are more stable with an increase of one per cent from last year. However, those numbers are still well below the 10-year average for the normally busy month of May.
What’s still also a concern is a lack of listings: there were 5,656 new listings in May, 18.3 percent fewer than a year before.
While this new market is a boon to homebuyers who are looking for affordability, the dip is impacting jobs in the province, particularly those in construction. And when a market is unstable, it makes everyone watching economic indicators start to worry.
If you’re planning on buying a home this spring or summer, get to know your local market to see if the hot warm weather real estate industry is going to work in your favour, or not.