Higher Borrowing Costs Continued to Impact Home Sales

Home sales have been impacted by both the affordability challenge presented by mortgage rate hikes and the psychological effect wherein home buyers who can afford higher borrowing costs have put their decision on hold to see where home prices end up. Expect current market conditions to remain in place during the slower summer months. Once home prices stabilize, some buyers will re-enter the market despite higher borrowing costs,

Ontario - Higher Borrowing Costs Continued to Impact Home Sales

Toronto, 05 July 2022 - Higher borrowing costs continued to impact home sales in June 2022. Sales totalled 6,474 – down by 41% compared to last year’s strong result. The number of transactions was also down compared to May 2022, but this is often the case due to the seasonal nature of the market.

The average selling price, at $1,146,254, remained 5.3% above the June 2021 level but continued to trend lower on a monthly basis. The MLS® Home Price Index Composite Benchmark was up by 17.9% year-over-year but also experienced a month-over-month dip compared to May. Annual price growth was driven more so by less expensive market segments, including townhouses and condominium apartments.

“Home sales have been impacted by both the affordability challenge presented by mortgage rate hikes and the psychological effect wherein home buyers who can afford higher borrowing costs have put their decision on hold to see where home prices end up. Expect current market conditions to remain in place during the slower summer months. Once home prices stabilize, some buyers will re-enter the market despite higher borrowing costs,” said TRREB President Kevin Crigger.

While the number of transactions was down year-over-year, the number of new listings was little changed over the same period. This has provided for more balance in the market, resulting in a more moderate annual pace of price growth.

“Listings will be an important indicator to watch over the next few months. With the unemployment rate low, the majority of households aren’t in a position where they need to sell their home. If would-be sellers decide to take a wait-and-see attitude over the next few months, it’s possible that active listings could trend lower as well. This could cause market conditions to tighten somewhat, providing some support for home prices,” said TRREB Chief Market Analyst Jason Mercer.

“Our region continues to grow because we attract people and businesses from all around the world. All of these people will require a place to live, whether they choose to buy or rent. Despite the shorter-term impact of higher borrowing costs, housing demand will remain strong over the long term, as long as we can produce homes within which people can live. Policymakers at all levels need to make this their key goal,” said TRREB CEO John DiMichele.

Residential Resale Market’s Shifting Benchmark Reality

Ottawa, July 6, 2022 - Members of the Ottawa Real Estate Board sold 1,508 residential properties in June through the Board’s Multiple Listing Service® System, compared with 2,122 in June 2021, a decrease of 29%. June’s sales included 1,138 in the residential-property class, down 31% from a year ago, and 370 in the condominium-property category, a decrease of 23% from June 2021. The five-year average for total unit sales in June is 1,966.

“After the frenzy of the past two years, we are witnessing Ottawa’s resale market normalize in 2022 and shift towards the more traditional seasonal ebb and flow cycle. While June transactions do typically taper as many look towards their summer holidays, last month’s sales were at a slower pace than we have seen in well over a decade,” states Ottawa Real Estate Board President Penny Torontow.

“We can likely attribute the decrease in unit sales to economic factors such as rising interest rates and cost of living/inflation. Other dynamics could include Buyer fatigue combined with a wait-and-see approach towards home prices, lack of confidence amongst consumers, and perhaps the uncertainty surrounding back-to-work arrangements as a long commute with rocketing gas prices will certainly affect decisions about where to live,” she adds. 

The average sale price for a condominium-class property in June was $438,977, an increase of 1% from 2021, while the average sale price for a residential-class property was $772,861, increasing 6% from a year ago. With year-to-date average sale prices at $815,797 for residential and $465,573 for condominiums, these values represent an 11% and 10%  increase over 2021, respectively.*

“It’s no secret that price increases have become more modest in the last two months–there’s a new benchmark reality in Ottawa. While our average price statistics provide an overall picture, as the market settles, there will be adjustment differences in various pockets of the city. For example, what happens in Westboro will not likely mirror Findlay Creek,” advises Torontow.

“But even as prices fluctuate, historically, real estate in Ottawa has always been and will continue to be stable and dependable in the long term. We aren’t likely to ever experience the significant dips that other regions may see. Prices won’t fall out; they are prone to level off to the reasonable rates of increase that we have historically experienced.”

“With an influx of 3,213 new listings in June, we are moving (albeit gradually) towards the goal of a more balanced market. Residential inventory has increased by 38% over last year at this time and is sitting at an approximate 1.9 months’ supply currently. Condominium housing stock has risen 14% to a 1.6 months’ supply for that property class. Once government-pledged supply measures are enacted, we are optimistic that goal is within reach.”

“Buyers, if you have been waiting on the sidelines, this may be an optimal time to venture back into your home search. There is more selection, fewer bidding wars, and less pressure to make a warp-speed decision. As for Sellers, your neighbourhood has its own characteristics and attributes that should weigh into the calculation of your property’s value. Contact a professional REALTOR® who has their hand on the pulse of Ottawa’s shifting real estate market today!”

REALTORS® also help with finding rentals and vetting potential tenants. Since the beginning of the year, OREB Members assisted clients with renting 2,919 properties compared to 2,252 last year at this time.

Home Listings Up, Sales Down and Prices Starting to Decrease

Metro Vancouver, 5, JUNE 2022 - With interest rates and housing supply increasing, Metro Vancouver* home buyers are operating in a changing marketplace to begin the summer season.  

The Real Estate Board of Greater Vancouver (REBGV) reports that residential home sales in the region totalled 2,444 in June 2022, a 35% decrease from the 3,762 sales recorded in June 2021, and a 16.2% decrease from the 2,918 homes sold in May 2022.  

Last month’s sales were 23.3% below the 10-year June sales average. 

"Home buyers have more selection to choose from and more time to make decisions than they did over the past year. Rising interest rates and inflationary concerns are making buyers more cautious in today’s housing market, which is allowing listings to accumulate."

Daniel John, Chair, Real Estate Board of Greater Vancouver

There were 5,256 detached, attached and apartment properties newly listed for sale on the Multiple Listing Service® (MLS®) in Metro Vancouver in June 2022. This represents a 10.1% decrease compared to the 5,849 homes listed in June 2021 and a 17.6% decrease compared to May 2022 when 6,377 homes were listed.  

The total number of homes currently listed for sale on the MLS® system in Metro Vancouver is 10,425, a 3.8% decrease compared to June 2021 (10,839) and a 4.1% increase compared to May 2022 (10,010).  

“We’re seeing downward pressure on home prices as we enter summer in Metro Vancouver due to declining home buyer activity, not increased supply,” John said. “To meet Metro Vancouver’s long-term housing demands, we still need to significantly increase housing supply.”  

For all property types, the sales-to-active listings ratio for June 2022 is 23.4%. By property type, the ratio is 14.3% for detached homes, 31.5% for townhomes, and 30.2% for apartments.

Sales to active listings ratio - June 2022:

• Detached homes 14.3%
• Townhomes 31.5%
• Condominiums 30.2%
• Total 23.4%

Generally, analysts say downward pressure on home prices occurs when the ratio dips below 12% for a sustained period, while home prices often experience upward pressure when it surpasses 20% over several months.

The MLS® Home Price Index composite benchmark price for all residential properties in Metro Vancouver is currently $1,235,900. This represents a 12.4% increase over June 2021, a two% decrease compared to May 2022, and a 2.2% decrease over the past three months.

Sales of detached homes in June 2022 reached 653, a 48.3% decrease from the 1,262 detached sales recorded in June 2021. The benchmark price for a detached home is $2,058,600. This represents a 13.4% increase from June 2021, a 1.7% decrease compared to May 2022, and a 1.8% decrease over the past three months.

Sales of apartment homes reached 1,326 in June 2022, a 25.3% decrease compared to the 1,774 sales in June 2021. The benchmark price of an apartment home is $766,300. This represents a 12.7% increase from June 2021, a 1.7% decrease compared to May 2022, and a 0.8% decrease over the past three months.

Attached home sales in June 2022 totalled 465, a 36% decrease compared to the 726 sales in June 2021. The benchmark price of an attached home is $1,115,600. This represents a 17.8% increase from June 2021, a 2.2% decrease compared to May 2022, and a 2.7% decrease over the past three months.

Alberta - June Sees Continued Cooling of Housing Market in Edmonton"

Edmonton, July 5, 2022 - Total residential unit sales in the Greater Edmonton Area (GEA) real estate market decreased 9.2% compared to May 2022 and saw a year-over-year decrease of 4.6% from June 2021.

New residential listings decreased 8.3% month-over-month from May 2022, but there was an increase of 4.1% from June of last year.

For June, single-family home unit sales were down 8.2% from June 2021 and decreased 11.6% from May 2022 at 1,534. Condo unit sales increased 1.8% from June 2021 but were down 4.3% from May 2022. Duplex/rowhouse unit sales were down both 4.7% year-over-year and 11.6% from last month.

Single-family homes averaged $494,302, a 4.5% year-over-year increase and a month-over-month increase of 0.3%. Condominiums sold for an average of $238,377, seeing a small decrease of 1.6% year-over-year, and down 0.3% when compared to May 2022. Duplex prices increased 9.1% from June 2021, selling at $387,811, but saw a 2.0% decrease from May 2022.

The MLS® Home Price Index (HPI) composite benchmark price* in the GEA came in at $416,700, an 8.3% increase from June 2021, with a nominal decrease of 0.1% recorded from May 2022.

“We continue to see a gradual decrease across the board in the Edmonton real estate market,” says REALTORS® Association of Edmonton Chair Paul Gravelle. “As interest rates and inflation continue to rise, we anticipate that we will see further impacts on the housing market in the days to come.”

Single-family homes averaged 27 days on the market, seeing an increase of four days from May 2022. Condos averaged 45 days on the market, increasing by one-day month-over-month, while duplexes averaged 29 days on the market, a four-day increase compared to last month. Overall, all residential listings averaged 33 days on the market, increasing by four days month-over-month and down two days as compared to June 2021.