Chilly Conditions in Canada’s Biggest Markets
The March numbers are in for real estate performance in Toronto and Vancouver – and the real estate boards of both cities have reported a steep downturn in home sales over last month, compared with last year’s activity.
In Toronto, home sales dropped a full 17 per cent to 7,765 units sold, down from 9,385 moved last March. Vancouver saw a decline of 18.3 per cent to 2,347 – the slowest March total since 2001, and 30 per cent below the region’s 10-year average.
Inventory Issues a Factor in the GTA
According to TREB President Ann Hannah, new buyers abound in Toronto – but they’re faced with a dwindling supply of certain types of desirable housing.
“Home ownership remains affordable for a household earning the average income in the Greater Toronto Area. There are many willing buyers in the marketplace today … other households simply haven’t been able to find the right house due to a shortage of listings in some market segments,” she states, adding that others may be holding off as a result of stricter mortgage rules and the additional Land Transfer Tax in the City of Toronto.
Vancouver Absorbs Impact of Market Change
Canada’s west end has long boasted the highest housing prices in the nation, and has been arguably the most dramatically impacted by last summer’s efforts to balance the housing market. Prices, while remaining sky-high, have been seen a drop to an average of $1,116,250 for two-storey dwellings.
According to REBGV President Sandra Wyant, “While home sales were below what’s typical for March, we are seeing more balance between the number of sales and listings on the market in the last two months, which is having a stabilizing impact on home prices.”
The slowdown has also affected available new inventory, as new listings for detached, attached and apartment units declined 17.2 per cent from last March to 4,839 this year – 14.4 per cent below the 10-year average.
Home Prices Remain High
With mortgage rates at record lows, and the headlines constantly reporting on the volatility of the housing market, some buyers may be anticipating a drop in housing prices – but other factors show that we’re not likely in store for a dramatic decline and the advance of a buyer’s market.
In fact, while the numbers of sales are down in both markets, only Vancouver has seen a price slump – Toronto’s are actually up year over year, according to the latest numbers released by Royal Le Page’s Q1 House Price Survey. The numbers show that the average cost of a two-storey detached home in the GTA now rings in at $67,252 – an increase of four per cent from last year.
These persistently high prices are a contributing factor to the drop off in buyers, despite constant demand in the region – and a disconnect expected to ease as the spring mortgage market heats up.
Says Gino Romanese, Senior Vice President, Royal LePage Real Estate Services Ltd, “Despite a brief discrepancy in buyer and seller expectations, multiple offer situations and bidding wars are still taking place in many areas of the city.”
RateSupermarket.ca Week in Review
No change to be seen in one-year and 10-year fixed, and 5-year variable mortgage rates – but the five-year fixed is back to its record low of 2.74 per cent, down from last week’s 2.77. We first saw this rate at the beginning of March – stay tuned for more info about this rate!