Market Watch May 2016 - Home Buyer Competition Remains Intense Across Many Regions

Home buyer competition remains intense across many regions while home selling prices continued to trend upward in April. As we move into the busiest time of the year, in terms of sales volume, strong competition between buyers will continue to push home prices higher. A greater supply of listings would certainly be welcome, but we would need to see a number of consecutive months in which listings growth outpaced sales growth before market conditions become more balanced.

Ontario - Record home sales in April

Toronto, May 4, 2016 -- Toronto Real Estate Board (TREB) President Mark McLean announced that there were 12,085 sales reported through TREB's Multiple List Service® (MLS®) System in April 2016. This result, which represented a record for the month of April, was up by 7.4% in comparison to April 2015.

For the TREB market area as a whole, annual sales growth was experienced for all major home types except semi-detached houses. In the City of Toronto, sales were down for detached and semi-detached houses as well as townhouses on a year-over-year basis. This dip in sales in the '416' area code was due to a lack of low-rise listings. Many would-be buyers were not able to find a home that met their needs.

"While April's sales result represented a new record for sales, that number could have been even higher if we had benefitted from more supply. In the City of Toronto in particular, some households have chosen not to list their home for sale because of the second substantial Land Transfer Tax and associated administration fee. The lack of available inventory, coupled with record sales, continued to translate into robust annual rates of price growth," said Mr. McLean.

Home selling prices continued to trend upward in April. The MLS® Home Price Index Composite Benchmark was up by 12.6% year-over-year. The average selling price was up by 16.2%. The higher growth rate reported for the average home price, as compared to the MLS® HPI, points to a greater share of high-end home sales this year compared to last.

"As we move into the busiest time of the year, in terms of sales volume, strong competition between buyers will continue to push home prices higher. A greater supply of listings would certainly be welcome, but we would need to see a number of consecutive months in which listings growth outpaced sales growth before market conditions become more balanced," said Jason Mercer, TREB's Director of Market Analysis.

Ottawa, May 5, 2016 -- Members of the Ottawa Real Estate Board (OREB) sold 1,714 residential properties in April through the Board’s MLS® System, compared with 1,567 in April 2015, an increase of 9.4%. The five-year average for April sales is 1,568.

“The Ottawa resale market continued its steady pace upwards in April, making it the best April for unit sales on record since 2010,” says Shane Silva, President of the OREB. “Units sold are up 548 since March, increasing in both the residential and condominium property class.”

April’s sales included 264 in the condominium property class, and 1,450 in the residential property class. The condominium property class includes any property, regardless of style (i.e., detached, semi-detached, apartment, townhouse, etc.), which is registered as a condominium, as well as properties, which are co-operatives, life leases and timeshares. The residential property class includes all other residential properties.

“In April, 3,644 homes were listed, up 13.8% since March, and down by 2.8% over April 2015,” says Silva. “Inventory levels at the end of the month remain healthy heading into, what is normally, the most active month of the year for OREB Members.”

The average sale price of a residential-class property sold in April in the Ottawa area was $403,603, an increase of 0.2% over April 2015. The average sale price for a condominium-class property was $261,017, a decrease of 1.8% over April 2015. The Board cautions that average sale price information can be useful in establishing trends over time but should not be used as an indicator that specific properties have increased or decreased in value. The average sale price is calculated based on the total dollar volume of all properties sold.

“The hottest segments in our market for April were sales in the $300,000 to $400,000 price range, followed by the $200,000 to $300,000 price range,” says Silva. “Residential two-storey and bungalows have the highest concentration of buyers in April. In addition to residential and condominium sales, OREB Members have assisted clients with renting 937 properties since the beginning of the year.”

British Columbia – Home sales remain at record levels across Metro Vancouver

Metro Vancouver, May 3, 2016 -- Residential property sales in the region totalled 4,781 in April 2016, an increase of 14.4% from the 4,179 sales recorded in April 2015 and a decrease of 7.6% compared to March 2016 when 5,173 homes sold.\

April sales were 41.7% above the 10-year sales average for the month.
“Home buyer competition remains intense across the region,” Dan Morrison, REBGV president said. “Whether you’re a home buyer or seller, it’s important to work with your local REALTOR® to get the information you need and to develop a strategy that will help you navigate today’s market.”

New listings for detached, attached and apartment properties in Metro Vancouver totalled 6,127 in April 2016. This represents an increase of 3.9% compared to the 5,897 units listed in April 2015 and a 2.4% decline compared to March 2016 when 6,278 properties were listed.
"While we’re seeing more homes listed for sale in recent months, supply is still chasing this unprecedented surge of demand in our marketplace," Morrison said.

The total number of properties currently listed for sale on the MLS® system in Metro Vancouver is 7,550, a 39.3% decline compared to April 2015 (12,436) and a 2.6% increase compared to March 2016 (7,358).

The sales-to-active listings ratio for April 2016 is 63.3%. This is indicative of a seller’s market.

Generally, analysts say that downward pressure on home prices occurs when the ratio dips below the 12% mark, while home prices often experience upward pressure when it reaches the 20-22% range in a particular community for a sustained period of time.

The MLS® Home Price Index composite benchmark price for all residential properties in Metro Vancouver is currently $844,800. This represents a 25.3% increase compared to April 2015.

Sales of detached properties in April 2016 reached 1,979, an increase of 9.0% from the 1,815 detached sales recorded in April 2015. The benchmark price for detached properties increased 30.1% from April 2015 to $1,403,200.

Sales of apartment properties reached 2,107 in April 2016, an increase of 33.4% compared to the 1,579 sales in April 2015.The benchmark price of an apartment property increased 20.6% from April 2015 to $475,000.
Attached property sales in April 2016 totalled 695, a decrease of 11.5%  compared to the 785 sales in April 2015. The benchmark price of an attached unit increased 22.1% from April 2015 to $608,600.

Alberta - Resale housing inventory up 18%, but prices remain strong

Edmonton, May 3, 2016 -- Despite an 18% increase in inventory for the Edmonton Census Metropolitan Area (CMA), all residential prices remain stable at $377,283 for April 2016. That is down less than 1.0% from the previous month and up less than 1.0% from last year.
The average single family home in the Edmonton CMA sold for $439,982 in April 2016, up marginally over March’s average price of $439,815 and April 2015’s average price of $438,641. Listings and sales unit volumes were down for single-family detached homes year-over-year, but up over the previous month.

Condo prices are down less than 1.0%, likely due to the lower unit sales relative to April 2015. Prices for April 2016 are also down about 1.0% relative to the previous month. Listings and sales of condominiums are up over March 2016, while listings are up and sales are down over April 2015.

“Prices in the Edmonton and Area market remain stable. This is good news for sellers who have been concerned about selling in a ‘buyer’s market’,” REALTORS® Association of Edmonton Chair Steve Sedgwick said. “Buyers continue to have a great selection of properties to choose from and sellers need to be competitive with their listings. Continued lack of significant movement in the average house price is a good signal that Edmonton’s economy is strong.”

Single-family homes had a 51% sales-to-listing ratio for April 2016, up 2.0% from March and down 3.0% year-over-year. Duplex/rowhouses sat at 51% as well, down 14% from 2015 but up 2.0% from the previous month. With a 38% sales-to-listing ratio (up 2.0% from last month, down 6.0% from last year) condos continue to be the most challenging type of property to sell.

1,498 residential properties were sold in the Edmonton CMA in April, up nearly 10% from the previous month, but down 6.0% from sales reported in April 2015. There were 938 single-family detached homes reported sold in the Edmonton CMA, a 9.0% percent increase month-over-month, and down 6.0% from the same time last year. 396 condos sold in April, up 18% over March and down 8.0% over April 2015. 148 duplex/rowhouses sold in April, up 3.0% from March and up 7.0% from April 2015.

“New listings were slightly down in April, but inventory remains high.” Sedgwick continues, “We expect to see sales continue to rise through the early summer months. It will be interesting to see whether there are many new listings adding to the existing inventory in upcoming months.”  

April’s all residential average days-on-market sat at 40 (7 days shorter than the previous year and 13 days shorter than March 2016).  On average in April, single-family homes sold in 35 days, condominiums sold in 46 days, and duplex/rowhouses sold in an average of 49 days.