Market watch - Quieter Summer Season Marked by Reduced sales And Listing Activity.

August is a traditionally slower month in the resale market due to summer vacations. Compounding the slowdown in market activity, Buyers are uncertain about their purchasing power given the additional interest rate hikes. While higher borrowing costs have impacted home purchase decisions, existing homeowners nearing mortgage renewal are also facing higher costs.

 

Ontario - Quieter Summer Season Marked by Reduced sales And Listing Activity.

Toronto,01 September 2022 -- There were 5,627 home sales reported through the Toronto Regional Real Estate Board9s (TRREB) MLS® System in August 2022, representing a year-over-year dip of 34.2% 3 a lesser annual rate of decline compared to the previous four months. The August sales result also represented a month-over-month increase compared to July.

Sales represented a higher share of new listings compared to the previous three months. If this trend continues, it could indicate some support for selling prices in the months ahead. On a year-over-year basis, the MLS® Home Price Index (HPI) was up by 8.9% and the average selling price for all home types combined was up by 0.9% to $1,079,500. The average selling price was also up slightly month-over-month, while the HPI Composite was lower compared to July. Monthly growth in the average price versus a dip in the HPI Composite suggests a greater share of more expensive home types sold in August.

While higher borrowing costs have impacted home purchase decisions, existing homeowners nearing mortgage renewal are also facing higher costs. There is room for the federal government to provide for greater housing affordability for existing homeowners by removing the stress test when existing mortgages are switched to a new lender, allowing for greater competition in the mortgage market. Further, allowing for longer amortization periods on mortgage renewals would assist current homeowners in an inflationary environment where everyday costs have risen dramatically,= said TRREB President Kevin Crigger.

The Office of the Superintendent of Financial Institutions (OSFI) should weigh in on whether the current stress test remains applicable. Is it reasonable to test home buyers at two percentage points above the current elevated rates, or should a more flexible test be applied that follows the interest rate cycle? In addition, OSFI should consider removing the stress test for existing mortgage holders who want to shop for the best possible rate at renewal rather than forcing them to stay with their existing lender to avoid the stress test. This is especially the case when no additional funds are being requested,= said TRREB CEO John DiMichele.

There are other issues beyond borrowing costs impacting housing affordability in the Greater Golden Horseshoe. The ability to bring on more supply is the longer-term challenge. However, we are moving in the right direction on this front. The strong mayor proposal from the province coupled with the recent commitment from Toronto Mayor John Tory to expand ownership and rental housing options are examples of this. TRREB looks forward to hearing additional initiatives from candidates vying for office in the upcoming municipal elections,= said TRREB Chief Market Analyst Jason Mercer.

 

Buyer Uncertainty Slows Down August Resales

Ottawa, September 6, 2022 -- Members of the Ottawa Real Estate Board sold 1,137 residential properties in August through the Board’s Multiple Listing Service® System, compared with 1,565 in August 2021, a decrease of 27%. August’s sales included 850 in the residential-property class, down 27% from a year ago, and 287 in the condominium-property category, a decrease of 28% from August 2021. The five-year average for total unit sales in August is 1,603.

“August is a traditionally slower month in Ottawa’s resale market ebb and flow cycle due to summer vacations. Compounding the slowdown in market activity, Buyers are uncertain about their purchasing power given impending additional interest rate hikes,” states Ottawa Real Estate Board President Penny Torontow.

“The lightning speed at which homes were selling at the start of 2022 is a thing of the past, evidenced by Days on Market (DOMs) inching closer to that 30-day mark. We have also observed a return to standard financing and inspection conditions and fewer multiple offer scenarios,” she adds.

The average sale price for a condominium-class property in August was $421,966, an increase of 4% from 2021.

The average sale price for a residential-class property was $707,712, increasing 5% from a year ago.

With year-to-date average sale prices at $795,978 for residential and $457,771 for condominiums, these values represent a 10% and 9 percent increase over 2021, respectively.*

2,093 properties were listed in August, boosting inventory to nearly 3 months for residential class properties and 2.2 months for condominiums.

“Prices are still rising slightly in some areas, albeit lower single-digit percentage increases, bringing back the moderate price-growth stability that is characteristic of the Ottawa resale market. What happened to prices in 2020 and 2021 was unusual. We are moving towards a balanced market state, where Buyers have choices and Sellers need to ensure they are pricing their properties accurately,” Torontow advises.

“The informed market knowledge and insight of a licensed REALTOR® is critical to both Buyers and Sellers navigating market shifts. Sellers will want to closely explore with their REALTOR® the best time and price to list their home to optimize a property’s days on market. Buyers can use the extra time to work with their REALTOR® on due diligence and finding a dream home that meets their needs within their financial parameters.”

REALTORS® also helped with finding rentals and vetting potential tenants. Since the beginning of the year, OREB Members have assisted clients with renting 4,172 properties compared to 3,182 last year at this time.

 

Britsh Colombia - Metro Vancouver's housing market sees fewer home buyers and sellers in August

Vancouver, 01 September 2022 -- Metro Vancouver’s housing market is experiencing a quieter summer season marked by reduced sale and listing activity.

The Real Estate Board of Greater Vancouver (REBGV) reports that residential home sales in the region totalled 1,870 in August 2022, a 40.7% decrease from the 3,152 sales recorded in August 2021, and a 0.9% decrease from the 1,887 homes sold in July 2022.

Last month’s sales were 29.2% below the 10-year August sales average.

"With inflationary pressure and interest rates on the rise, home buyer and seller activity shifted below our long-term seasonal averages this summer. This shift in market conditions caused prices to edge down over the past four months."

Andrew Lis, REBGV Director, economics and data analytics

There were 3,328 detached, attached, and apartment properties newly listed for sale on the Multiple Listing Service® (MLS®) in Metro Vancouver in August 2022. This represents a 17.5% decrease compared to the 4,032 homes listed in August 2021 and a 16% decrease compared to July 2022 when 3,960 homes were listed.

The total number of homes currently listed for sale on the MLS® system in Metro Vancouver is 9,662, a 7.3% increase compared to August 2021 (9,005) and a 6.1% decrease compared to July 2022 (10,288).

“Home buyers and sellers are taking more time to assess what this changing landscape means for their housing needs,” Lis said. “Preparation is critical in today’s market. Work with your Realtor to assess what today’s home prices, financing options, and other considerations mean for you.”

For all property types, the sales-to-active listings ratio for August 2022 is 19.4%. By property type, the ratio is 12.2% for detached homes, 25.3% for townhomes, and 24.8% for apartments.

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 $1,180,500. This represents a 7.4% increase over August 2021 and a 2.2% decrease compared to July 2022.

Sales of detached homes in August 2022 reached 517, a 45.3% decrease from the 945 detached sales recorded in August 2021. The benchmark price for a detached home is $1,954,100. This represents a 7.9% increase from August 2021 and a 2.3% decrease compared to July 2022.

Sales of apartment homes reached 998 in August 2022, a 38.8% decrease compared to the 1,631 sales in August 2021. The benchmark price of an apartment home is $740,100. This represents an 8.7% increase from August 2021 and a two% decrease compared to July 2022.

Attached home sales in August 2022 totalled 355, a 38.4% decrease compared to the 576 sales in August 2021. The benchmark price of an attached home is $1,069,100. This represents a 12.7% increase from August 2021 and a 2.5% decrease compared to July 2022.

 

Alberta - Supply Levels Ease With Fewer New Listings in August

City of Calgary, September 1, 2022 – August sales activity was comparable to the strong levels recorded last year and well above long-term trends for the month.

While sales have remained relatively strong, there continues to be a shift towards more affordable options as the year-over-year pullback in detached sales was nearly matched by gains for multi-family product types.

“While higher lending rates have slowed activity in the detached market, we are still seeing homebuyers shift to more affordable options which is keeping sales activity relatively strong,” said CREB® Chief Economist Ann-Marie Lurie. “This makes Calgary different than some of the larger cities in the country which have recorded significant pullbacks in sales.”

At the same time, new listings continue to trend down, preventing any supply gains or a substantial shift in the months of supply.

Despite year-over-year gains in new listings, the spread between new listings and sales this month narrowed compared to the past three months. This caused total inventory to trend down and prevented any significant shift in the months of supply. The months of supply in August remained at just above two months, not at tight as earlier in the year, but still below levels traditionally seen this time of year.

For the third month in a row, benchmark prices eased declining to $531,800. While the reduction reflects shifting market conditions, it is important to note that previous gains are not lost, and prices remain over 11% higher than last year.

Detached- Sales continued to trend down compared to levels seen earlier in the year and August of last year. While the recent declines have not offset the strong gains reported earlier in the year, conditions are changing in this segment of the market. At the same time, we have seen listings continue to ease in for lower-priced homes. This is causing persistently tight conditions for homes priced below $500,000. Meanwhile, supply gains in the higher price range of the market are supporting more balanced conditions.

Easing demand has had an impact on prices which have trended down relative to the high levels achieved in May. However, with a benchmark price of $633,000, levels are still over 13% higher than last year.

Semi-Detached - There was a significant pullback in new listings relative to a slight easing of sales for semi-detached properties this month. This caused the sales-to-new-listings ratio to push above 80% for the first time since April while total inventory dropped relative to levels seen over the past several months and last year. Like the detached sector, conditions do vary depending on price ranges with the lower-price ranges continuing to see relatively tight market conditions.

Despite the adjustment this month, prices still trended down compared to May levels. However, like other property types, price levels are over 10% higher than last year with a benchmark price of $569,300.

Row - Despite sales trending down relative to levels seen earlier in the year, the row-home market remains strong and year-to-date levels are nearly 50% higher than last year. At the same time, there was a notable decline in new listings this month causing a decline in inventory levels. This prevented any significant adjustments to the months of supply which remained below two months.

While market conditions remain relatively tight, home prices have remained fairly stable over the past few months. Overall, the benchmark price for row properties in August was over 14% higher than levels reported last year.

Apartment Condominium - Sales activity improved in August, contributing to year-to-date record sales of 4,576 units, which is an increase of 65% compared to last year. Some of this growth was possible thanks to this segment of the market having more supply. However, the recent growth in sales relative to new listings has caused the supply gap to narrow.

Though conditions have shifted over the past month, prices remain relatively stable compared to July but are over 10% higher than last year’s prices. Despite the recent gains in prices, apartment condominium sales remain below peak prices set back in 2014.




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