Higher borrowing costs, continued uncertainty about the economy and Bank of Canada's decision-making, and the constrained supply of listings resulted in fewer home sales in August 2023 compared to August 2022. The average selling price remained virtually unchanged over the same period. On a seasonally adjusted monthly basis, sales and average price edged lower.
Ontario - Moving Into Balanced Market Conditions.
Toronto, 05 September 2023 -- Higher borrowing costs, continued uncertainty about the economy and Bank of Canada's decision-making, and the constrained supply of listings resulted in fewer home sales in August 2023 compared to August 2022. The average selling price remained virtually unchanged over the same period. On a seasonally adjusted monthly basis, sales and average price edged lower.
“Looking forward, we know there will be solid demand for housing – both ownership and rental – in the Greater Toronto Area and broader Greater Golden Horseshoe. Record immigration levels alone will ensure this. In the short term, we will likely continue to see some volatility in terms of sales and home prices, as buyers and sellers wait for more certainty on the direction of borrowing costs and the overall economy,” said TRREB President Paul Baron. Greater Toronto Area REALTORS® reported 5,294 sales in August 2023 – down by 5.2% compared to August 2022. New listings were up by 16.2% year-over-over, providing some relief on the supply front, but year-to-date listings are still down substantially compared to the same period last year. Seasonally adjusted sales were down slightly by 1% month-over-month compared to July 2023, while new listings were up slightly by 1.3% compared to July.
“More balanced market conditions this summer compared to the tighter spring market resulted in selling prices hovering at last year’s levels and dipping slightly compared to July. As interest rates continued to increase in May, after a pause in the winter and early spring, many buyers have had to adjust their offers in order to qualify for higher monthly payments. Not all sellers have chosen to take lower than expected selling prices, resulting in fewer sales,” said TRREB Chief Market Analyst Jason Mercer.
The MLS® Home Price Index Composite benchmark for August 2023 was up by 2.5% year-over-year. The average selling price was also up, but by less than one% to $1,082,496 over the same timeframe. On a month-over-month seasonally adjusted basis, the MLS® HPI Composite benchmark was virtually unchanged and the average price edged lower by 1.6%.
“While higher interest rates have certainly impacted affordability, the prospect of higher taxes will also hit households’ balance sheets, especially younger buyers with limited savings. With the City of Toronto moving to raise the municipal land transfer tax (MLTT) rate on properties over $3 million as a revenue tool, it must also consider helping first-time home buyers struggling to enter the market by adjusting their tax rebate threshold to reflect today’s higher home prices,” said TRREB CEO John DiMichele.
Ottawa Resale Market Stalls in August, Supply Challenges Persist
Ottawa, September 8, 2023 -- Members of the Ottawa Real Estate Board (OREB) sold 1,196 residential properties in August through the Board’s Multiple Listing Service® (MLS®) System, compared with 1,130 in August 2022, an increase of 6%. August’s sales included 903 in the freehold-property class, up 7% from a year ago, and 293 in the condominium-property category, a 2% increase from August 2022. The five-year average for total unit sales in August is 1,525.
“Sales activity was up marginally on a year-over-year basis in August but remained well below the historical average for this time of year,” says Ken Dekker, OREB President. “There is no shortage of demand given increased immigration and the large Canadian population cohort entering the market. The lack of suitable, affordable housing is a hindrance. High borrowing costs and economic uncertainty are impacting both sellers and buyers, which we expect will continue to result in further market fluctuations.”
Janice Myers, OREB CEO, highlights that these latest figures coincide with the City of Ottawa’s allocation of $110 million for affordable housing. “Even if interest rates were to drop and the economy stabilized, housing will remain out of reach for many Ottawa residents. Collaboration among all levels of government and stakeholders is vital to improving affordability for homeowners and tenants alike. And we need to expand provincial regulations, allowing four or more residential dwelling units on serviced lots, to promote higher-density housing.”
The average sale price for a freehold-class property in August was $709,739, an increase of 0.5% from 2022, and a 5.6% decrease over July 2023 prices.
The average sale price for a condominium-class property was $425,968 an increase of 1% from a year ago, although 1.4% lower than July 2023 prices.
With year-to-date average sale prices at $732,220 for freeholds and $432,571 for condos, these values represent an 8% decrease over 2022 for freehold-class properties and a 5.5% decrease for condominium-class properties.
August’s new listings (2,228) increased 7% over August 2022 (2,090) and were on par with last month (2,234). The 5-year average for new listings in August is 2,177.
Months of Inventory for the freehold-class properties has increased to 3 months from 2.9 months in August 2022 and 2.7 months in July 2023.
Months of Inventory for condominium-class properties remains on par with August 2022 at 2.2 months, a slight decrease from 2.3 months in July 2023.
Days on market (DOM) for freeholds have increased to 31 days from 25 days in August 2022 and 26 days in July 2023.
Days on market (DOM) for condos have increased to 29 days from 28 days in August 2022 and 28 days in July 2023.
British Columbia - Price Gains Cooling And Sales Slowing.
Metro Vancouver, 15 Aug 2023 -- August As summer winds to a close, higher borrowing costs have begun to permeate the Metro Vancouver1 housing market in predictable ways, with price gains cooling and sales slowing along the typical seasonal pattern.
The Real Estate Board of Greater Vancouver (REBGV) reports that residential home sales in the region totalled 2,296 in August 2023, a 21.4% increase from the 1,892 sales recorded in August 2022. This was 13.8% below the 10-year seasonal average (2,663).
"It’s been an interesting spring and summer market, to say the least. Borrowing costs are fluctuating around the highest levels we’ve seen in over ten years, yet Metro Vancouver’s housing market bucked many pundits’ predictions of a major slowdown, instead posting relatively strong sales numbers and year-to-date price gains north of 8%, regardless of home type." Andrew Lis, REBGV director of economics and data analytics
There were 3,943 detached, attached and apartment properties newly listed for sale on the Multiple Listing Service® (MLS®) in Metro Vancouver in August 2023. This represents an 18.1% increase compared to the 3,340 homes listed in August 2022. This was 5.3% below the 10-year seasonal average (4,164).
The total number of homes currently listed for sale on the MLS® system in Metro Vancouver is 10,082, a 0.2% decrease compared to August 2022 (10,099). This was 13.4% below the 10-year seasonal average (11,647).
Across all detached, attached and apartment property types, the sales-to-active listings ratio for August 2023 is 23.9%. By property type, the ratio is 14.2% for detached homes, 30.3% for townhomes, and 31.9% for apartments.
Analysis of the historical data suggests 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 surpass 20% over several months.
“It’s a bit of a tortoise and hare story this year, with sales starting the year slowly while prices increased due to low inventory levels,” Lis said. “As fall approaches, sales have caught up with the price gains, but both metrics are now slowing to a pace that is more in line with historical seasonal patterns, and with what one might expect given that borrowing costs are where they are.”
The MLS® Home Price Index composite benchmark price for all residential properties in Metro Vancouver is currently $1,208,400. This represents a 2.5% increase over August 2022 and a 0.2% decrease compared to July 2023.
Sales of detached homes in August 2023 reached 591, a 13.2% increase from the 522 detached sales recorded in August 2022. The benchmark price for a detached home is $2,018,500. This represents a 3.3% increase from August 2022 and a 0.3% increase compared to July 2023.
Sales of apartment homes reached 1,270 in August 2023, a 27.4% increase compared to the 997 sales in August 2022. The benchmark price of an apartment home is $770,000. This represents a 4.4% increase from August 2022 and a 0.2% decrease compared to July 2023.
Alberta - August Sees Record-high Sales Amidst Historic Low Inventory, Pushing Prices Higher
City of Calgary, September 1, 2023 – Thanks to a surge in the condominium market, August sales reached a record high with 2,729 sales. Despite the record levels reported over the past several months, year-to-date sales are still down by 15% compared to last year.
While new listings did improve compared to levels seen this time last year, the sales-to-new-listings ratio remained elevated at 87%, preventing any significant shift from the low inventory situation. Inventory levels in August dropped to 3,254 units, not only a record low for the month but well below the 6,000 units that are typically available. Low inventory combined with high sales this month ensured the months of supply remained low at just over one month.
Higher lending rates have caused many buyers to either hold off on purchase decisions or shift toward more affordable products on the market,” said CREB® Chief Economist Ann-Marie Lurie. “The challenge has been the availability of supply, especially in the detached market. Inventory levels hit record lows in August, and while new listings are higher than last year, conditions continue to favour the seller, driving further price gains.
The unadjusted benchmark price reached $570,700 in August, representing the eighth consecutive monthly gain. Prices have trended up across all property types, with row-style properties reporting the largest increase.
Detached: Record low inventory levels this month were primarily driven by pullbacks for homes priced under $700,000. While new listings did improve compared to last year, most of the growth was driven by homes priced over $700,000. August sales did improve over last year’s levels. However, limited supply in the lower price ranges has likely prevented stronger detached home sales.
Persistently tight conditions drove further price gains this month. As of August, the unadjusted benchmark price reached $696,700. Nearly one% higher than last month and over 10% higher than last year's levels. The highest year-over-year price gains occurred in the most affordable regions of the city's North East and East districts.
Semi-Detached: The 236 new listings and 197 sales did little to change the low inventory situation. While inventory levels did remain comparable to last month, they are still 35% below last year’s levels and at record lows for the month. Relatively strong sales combined with low inventory levels have given sellers the advantage.
With months of supply remaining exceptionally low throughout 2023, we continue to see upward pressure on home prices. As of August, the semi-detached unadjusted benchmark price reached $623,200, a monthly gain of 1% and 10% higher than last year. Price growth did range across each of the Calgary districts, but the strongest year-over-year gains were reported in the most affordable districts of the North East and East.
Row: The gain in new listings did little to offset the strong sales activity as the sales-to-new-listings ratio remained high at 94%. This prevented any additions to the inventory and left the months of supply below one month for the fifth consecutive month.
The persistently tight conditions placed further upward pressure on home prices. In August, the unadjusted benchmark price reached $413,200, a monthly gain of over 1% and nearly 16% higher than levels reported last year. Year-over-year gains have occurred across all districts, ranging from 12% in the North West to 29% in the East district.
Apartment Condominium: August sales continue to rise over last month and last year’s levels. Recent gains have caused year-to-date sales to reach 5,582 units, nearly 22% higher than last year’s levels and a new record high for the city. Tight rental markets and relative affordability have driven many purchasers to the apartment condominium sector. At the same time, new listings have struggled to keep pace as the sales-to-new-listings ratio bumped up to 98% in August, causing inventories to ease and the months of supply to drop to one month.
The tight market conditions have been placing upward pressure on home prices, and as of August, the unadjusted benchmark price reached $309,100, a monthly gain of over one% and a year-over-year gain of over 13%. The City Centre is the only district that did not report a monthly price gain, and prices are still below their previous highs in 2014. This is partly due to better supply/demand balances in the City Centre compared to other parts of the city.