Strong Sales & Price Growth in August

The Canadian real estate market continued its strong trend in most areas that are not affected by oil prices, with a noticeable growth in both sales numbers and prices.
 
As the population in the Ontario Greater Toronto Area and British Columbia Greater Vancouver Area continues to grow, the resulting growth in households coupled with favourable economic conditions and low borrowing costs means that we remain on track for another record year for home sales.

Alberta’s economy has been under enormous pressure for some time, but the residential real estate market in the Edmonton Census Metropolitan Area continues to hold. Prices and unit sales for all residential homes are consistent with last year, down less than 1.0% and 2.0% respectively.

Ontario – Strong sales and price growth in August

Toronto, September 7, 2016 – Toronto Real Estate Board (TREB) President Larry Cerqua announced that Greater Toronto Area REALTORS® reported a record 9,813 sales through TREB's Multiple Listing Service® (MLS®) System in August 2016.

While this sales result was 23.5% above the number of transactions reported for August 2015, it is important to note that the majority of sales are reported on working days and there were two additional working days in August 2016 compared to 2015. When the year-over-year discrepancy in working days is accounted for, the annual percentage change in sales is closer to 13%.

"The conditions underlying strong demand for ownership housing remained in place, including a relatively strong regional economy, growth in average earnings and low borrowing costs. Unfortunately, we did not see any relief on the listings front, with the number of new listings down compared to last year. This situation continued to underpin very strong home price growth, irrespective of home type or area," said Mr. Cerqua.

The MLS® Home Price Index (HPI) Composite Benchmark for August 2016 was up by 17.2% on a year-over-year basis. Similarly, the average selling price for all home types combined was up by 17.7% on an annual basis to $710,410. Both the MLS® HPI benchmarks and average prices for low-rise home types were up by double digits percentage-wise.

"Population in the GTA continues to grow. The resulting growth in households couple d with favourable economic conditions and low borrowing costs means that we remain on track for another record year for home sales. Against this backdrop, TREB will also be releasing new third-party research, and consumer and REALTOR® survey results throughout the fall and winter, with discussions focusing on foreign buying activity and issues affecting the supply of ownership housing," said Jason Mercer, TREB's Director of Market Analysis.

Ottawa, September 6, 2016 – Members of the Ottawa Real Estate Board (OREB) sold 1,484 residential properties in August through the Board’s MLS® System, compared with 1,276 in August 2015, an increase of 16.3%. The five-year average for August sales is 1,265.

“To date, this has been a record-breaking year for units sold,” says Shane Silva, President of OREB. “The year started off a little sluggish, but as soon as April hit we were either breaking records, or outpacing the year before considerably. Not only are we up 16.3% over last year, this has also been the best August on record ever for OREB Members, blowing the average for August sales out of the water. This is a-typical of August when units sold normally start to decline approaching the fall.”

“Units listed in both residential and condominium property classes continue to decline, as well as active listings at end of the month,” says Silva. “These numbers suggest that buyers have less options when looking to purchase, with the potential of entering into a seller’s market soon.”

August’s sales included 295 in the condominium property class, and 1,189 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.

“Average sale prices have been keeping steady all year,” says Silva. “This past month, however, there were six more properties sold in the $1 million plus range over last year, a possible explanation for the bump in average sales price for both condo and residential properties.”

The average sale price of a residential-class property sold in August in the Ottawa area was $389,786 an increase of 2.5% over August 2015. The average sale price for a condominium-class property was $272,166, an increase of 11.1% over August 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 August continued to be 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 almost 2,200 properties since the beginning of the year.”

British Columbia –  Home sales return to typical August levels

Metro Vancouver, September 2, 2016 – For the second straight month, home buyer demand in Metro Vancouver moved off of the record-breaking pace seen earlier this year and returned to more typical levels.

The Real Estate Board of Greater Vancouver (REBGV) reports that residential property sales in Metro Vancouver totalled 2,489 in August 2016, a decline of 26% compared to the 3,362 sales in August 2015; 10.2% less than the 2,771 sales in August 2014; and 1.0% less than the 2,514 sales in August 2013. August 2016 sales also represent a 22.8% decline compared to last month’s sales.

From a historical perspective, last month’s sales were 3.5% below the 10-year sales average for the month.

“The record-breaking sales we saw earlier this year were replaced by more historically normal activity throughout July and August,” Dan Morrison, REBGV president said. "Sales have been trending downward in Metro Vancouver for a few months. The new foreign buyer tax appears to have added to this trend by reducing foreign buyer activity and causing some uncertainty amongst local home buyers and sellers.

“It’ll take some months before we can really understand the impact of the new tax. We'll be interested to see the government's next round of foreign buyer data."
New listings for detached, attached and apartment properties in Metro Vancouver totalled 4,293 in August 2016. This represents an increase of 0.3% compared to the 4,281 units listed in August 2015 and an 18.1% decrease compared to July 2016 when 5,241 properties were listed.

The total number of properties currently listed for sale on the MLS® in Metro Vancouver is 8,506, a 21.9% decline compared to August 2015 (10,897) and a 1.9% increase from July 2016 (8,351).

The sales-to-active listings ratio for August 2016 is 29.3%. 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.

The MLS® Home Price Index composite benchmark price for all residential properties in Metro Vancouver is currently $933,100. This represents a 31.4% increase compared to August 2015 and a 4.9% increase over the last three months.

“In aggregate, we continue to see an imbalance between supply and demand in most communities. However, we’re also seeing fewer detached sales in the highest price points and fewer detached home sales relative to all residential sales,” Morrison said.

“This is causing average sale prices to show a decline in recent months, while benchmark home prices remain virtually unchanged from July.”

The average price is the simplest home price measure to explain but is not the most accurate since it may be skewed by the mix of properties. More high-end or low-end sales will skew the number up or down. Based on the Consumer Price Index, MLS HPI® benchmark prices are a more reliable and stable indicator of typical home prices across regions over time.

Sales of detached properties in August 2016 reached 715, a decrease of 44.6% from the 1,290 detached sales recorded in August 2015. The benchmark price for detached properties increased 35.8% from August 2015 to $1,577,300. This represents a 4.2% increase over the last three months.

Sales of apartment properties reached 1,343 in August 2016, a decrease of 10.1% compared to the 1,494 sales in August 2015. The benchmark price of an apartment property increased 26.9% from August 2015 to $514,300. This represents a 6.1% increase over the last three months.

Attached property sales in August 2016 totalled 431, a decrease of 25.4% compared to the 578 sales in August 2015. The benchmark price of an attached home increased 31.1 per cent from August 2015 to $677,600. This represents a 7.1% increase over the last three months.
 
Alberta – Real estate market on par with last year

Edmonton, September 2, 2016 – August’s all residential average sale price in the Edmonton Census Metropolitan Area (CMA) remains consistent with last August at $369,956, down 4.0% from July of this year. The price of single family homes in August dropped 4.0% relative to July from $450,366 to $434,362. Year-over year prices remained stable decreasing by less than 1.0%. The average condo sale price for August 2016 of $251,526 is down 2.0% month-over-month (m/m) and 1.0% year-over-year (y/y). The average duplex/rowhouse sold for $344,377 is down 2.0% y/y and down 1.0% (m/m).

“Alberta’s economy has been under enormous pressure for some time, but the residential real estate market in the Edmonton CMA continues to hold. Prices and unit sales for all residential homes are consistent with last year, down less than 1.0% and 2.0% respectively,” said Steve Sedgwick, Chair of the REALTORS® Association of Edmonton.

At 1,433 units reported sold, all residential sales in the Edmonton CMA were down 5.0% m/m and down 2.0% y/y. 861 single family homes were reported sold in August 2016, down 3.0% from the previous year.  Reported condo sales at 406 were down 6.0% over August 2015. Duplex/rowhouse sales at 136 were up 11% over last year. New residential listings were down 5.0% m/m and over 6.0% y/y.

“While this is one of the most active times of the year, we are seeing both listings and sales tapering off as we move into the fall months. This is standard in our local real estate cycle,” said Sedgwick. “While unit sales for condos have been impacted the most, prices remain stable. This is thanks in part to the continuing trend of unit sales of over $750,000 that are keeping average sales price of condos elevated by almost 3.0%.”

The number of days the average home in the Edmonton CMA took to sell in the month of August was 55. This is consistent with August 2015 and down one day from July 2016. On average, single family detached homes sold in 49 days in August 2016, while condominiums sold in an average of 62 days and duplex/rowhouses sold in 56 days.

There were 7,908 residential properties available in the Edmonton CMA at the end of August, down 2.0% from 8,048 in July 2016, but up 9.4% from the 7227 properties available on the MLS® System at the end of August 2015.