Market Watch August 2016 — Summer Sales Sizzle in a Hot July

The Canadian Real Estate market continues to sizzle in Ontario’s Greater Toronto Area, while it has moderated in many other regions in the Country.

The less frenetic pace of home sales will likely provide a much needed boost to the inventory of homes for sale. The rate of home price appreciation is also expected to slow from the unsustainable level exhibited this spring.

Ontario – Strong July Price Growth

Toronto, August 4, 2016 – Toronto Real Estate Board (TREB) President Larry Cerqua announced that TREB REALTOR® Members reported 9,989 home sales through TREB's Multiple Listing Service® (MLS®) System in July 2016. At just shy of 10,000 transactions, this was the best result on record for the month of July.

While sales were up on a year-over-year basis, the number of new listings was down over the same period, representing the continuation of a troubling trend in the GTA. "GTA REALTORS® have been working very hard on behalf of their buyer clients to help them find a home meeting their needs. Unfortunately, listings for single-detached and semi-detached houses and townhouses continue to be in short supply. The result has been an increase in pent-up demand and annual rates of price increases well above the rate of inflation. Housing policy is now top of mind for all levels of government. Policy makers need to be focusing on solutions to the sustained lack of low-rise inventory throughout the GTA," said Mr. Cerqua.

The MLS® Home Price Index (HPI) Composite Benchmark was up by 16.7% in July 2016 compared to the same month a year earlier. Similarly, the average selling price for all home types combined was up by 16.6% year-over-year to $709,825.

"Relatively strong labour market conditions, above-inflation average income growth, and record low borrowing costs have kept many households confident about purchasing a home. As long as very strong buying intentions are up against an extreme shortage of listings, expect home price growth to greatly outpace the rate of inflation," said Jason Mercer, TREB's Director of Market Analysis.

Ottawa, August 5, 2016 – Members of the Ottawa Real Estate Board (OREB) sold 1,491 residential properties in July through the Board’s MLS® System, compared with 1,430 in July 2015, an increase of 4.3%. The five-year average for July sales is 1,413.

“Sales continue to outpace 2015 numbers both in monthly and year-to-date comparisons,” says Shane Silva, President of OREB. “However, we are seeing the typical summer slowdown in July compared to June’s record-breaking numbers. Units listed in both residential and condominium property classes have declined throughout the year, which has affected overall inventory levels. The number of active listings at the end of July 2016 is down about 15% compared to July 2015.”

July sales included 277 in the condominium property class, and 1,214 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.

“We are just over the mid-year mark for 2016 and our year-to-date sales volume is up by 5.3% over last year, ringing in at a whopping 3.6 billion dollars,” says Silva. “Prices have remained quite steady in comparison to last year, with the increased number of units sold nudging the total sales volume up for the year.”

The average sale price of a residential-class property sold in July in the Ottawa area was $398,608, an increase of 1.1% over July 2015. The average sale price for a condominium-class property was $259,794, an increase of 1.2% over July 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 July were two-storey and bungalow residential homes in the $300,000 to $400,000 price range, followed by one-level and two-storey condos in the $200,000 to $300,000 price range,” says Silva. “In addition to residential and condominium sales, OREB Members have assisted clients with renting over 1,800 properties since the beginning of the year.”

British Columbia – Housing Market Slows to a Simmer in BC

Vancouver, August 11, 2016 – The British Columbia Real Estate Association (BCREA) reports that 9,900 residential unit sales were recorded by the MLS® in July, down 3.4% from the same month last year. Total sales dollar volume was $6.57 billion in July, up 5.4% compared to the previous year. The average MLS® residential price in the province was up 9.1% year-over-year, to $663,411.

"Housing demand has moderated in many regions of the province, after setting records earlier in the year," said Cameron Muir, BCREA Chief Economist. "The less frenetic pace of home sales will likely provide a much needed boost to the inventory of homes for sale. The rate of home price appreciation is also expected to slow from the unsustainable level exhibited this spring."

Year-to-date, BC residential sales dollar volume increased 45.5% to $56.5 billion, when compared with the same period in 2015. Residential unit sales climbed by 25% to 77,261 units, while the average MLS® residential price was up 16.4% to $731,189.

Alberta – Price Stability Continues in Edmonton’s Residential Market

Edmonton, August 3, 2016 – The all residential average sale price continues to remain strong at $384,504 up almost 2.0% over the previous month and over 3.0% from July 2015. At $450,366, single family homes experienced an increase in average price of over 3.0% from both the previous month and year. The 2.0% drop in average condo price month-over-month can be partially attributed to the sale of several luxury properties in June that bolstered the average price. The average condo sale price for July 2016 of $257,482 remains the same as July 2015.  The average duplex/rowhouse sold for $348,050; down 2.0% year-over-year (y/y) and down 1% month-over-month (m/m).

“We can attribute much of the average price increase to the strength of high end home sales. When we look at the median price of residential properties, we see a clearer picture of what is happening to prices. The median sales price for all residential is up less than a percent from last year. We are continuing to see strong stable pricing throughout the Edmonton region despite slower sales.”

At 1,515 units reported sold, all residential sales in the Edmonton CMA were down 15% m/m and down 16% y/y. 938 single family homes were reported sold in July 2016, down 16% from the previous month and 16% from July 2015.  Reported condo sales at 401 were down 13% over June and 25% from the previous year. Duplex/rowhouse sales at 154 in July are up 11% y/y but down 10% m/m.

“The July slow down in unit sales is typical. May and June remain the busiest months of the year when it comes to sales volume. Every year we traditionally see a slow down in July and August followed by an uptick in September,” says REALTORS® Association of Edmonton Chair Steve Sedgwick. “There is no question that the pace and volume of sales has dropped. The positive side of this is that there continues to be a good selection of inventory for buyers.”
 
The number of days the average home in the Edmonton Census Metropolitan Area (CMA) took to sell in the month of July was 56. This is up 3 days from the previous month and 6 days from July of 2015. On average, single family detached homes sold in 52 days in July 2016, while condominiums sold in an average of 61 days and duplex/rowhouses sold in 57 days.

Total new residential listings in July were 2,895, down 7.0% from July 2015 and down 5.0% from the previous month. There were 8,048 residential properties available in the Edmonton CMA at the end of July, down from 8,179 in June, but up from the 7,226 properties available on the MLS® System at the end of July 2015. That is up from 7,177 in June of 2015 and 5,609 in June of 2014.