There’s an interesting pattern emerging in Canadian real estate: ever since the Bank of Canada’s first rate cut, home sales have increased as buyers get improved affordability, though still well below the long-term average.
Price recovery is still yet to be found, and sales volume trended up again 1.3 per cent month-over-month in August, reaching its highest level since January 2020.
At the same time, new listing activity continues to accumulate with new listings climbing for the fourth straight month. Will this trend continue? The market will head into buyer’s market territory, where supply is outgrowing demand.
With that in mind, there are expectations that future rate cuts into 2025 well lead to cautious optimism among potential buyers and investors.
Newly listed properties in Edmonton and Calgary offset GTA decline
Despite the uptick in sales, the market remains mostly stuck in a holding pattern as many buyers are waiting for improved affordability before making purchases.
The number of newly listed properties increased by 1.1 per cent month-over-month in August, with approximately 177,450 properties available for sale — up 18.8 per cent from the previous year, but still below historical averages.
But for the second month in a row, there was a boost in new supply in Calgary, with Edmonton also witnessing an uptick of listings. The rise of newly listed properties in Edmonton and Calgary offsets a decline in the GTA.
Consistent, stable increase in sales-to-new-listings
The national sales-to-new listing ratio rose slightly to 53 per cent, matching our record in April. We’re a long way from returning to what was our highest average of sales-to-new listings which we achieved in December 2023: 81 per cent.
We have been relatively and consistently stable ever since our increase from January’s 46 per cent to February’s 52 per cent. So, it may be some news that we’ve matched our April 2024 average.
Prices
After Canada experienced a record high price in 2022, the market recoiled down about as quickly as it jumped up. Since the bottom of the recoil, we’ve seen very little upward or downward momentum in price.
Significant fluctuation in GTA condominiums
Toronto area condominium apartments are having a significant fluctuation, with a recoil off of an all-time high price and a few bounces since the blow-off top.
Source: x.com/Tablesalt13/
It’s clear that the outlook doesn’t look good for 2025, as it seems it will touch the 350 margin — the record low from around 450 in January 2022.
Daniel Foch and Nick Hill are co-hosts of The Canadian Real Estate Investor Podcast. Daniel Foch, a real estate broker and analyst, is frequently featured in major media and has advised on over $1BN in real estate transactions, focusing on affordable housing. Nick Hill, a real estate investor and mortgage agent, has a background in business, commercial real estate and startups, working with investors and developers across Canada.
Don’t forget that TRREB allows each Terminate and relist (same brokerage, same property and same owner within the timeframe of the initial listing) to be counted EACH time as a NEW Listing.
I pointed it out a couple of Annual Meetings ago and a few folks in the (members only) audience had never heard of the Re-List Share Comparison Chart that TRREB published (around lunchtime) within the Market Stats (2nd from right circle on main landing page).
Recently approx 30% of the Published-as New Listings Total on Market Watch are Do-Overs.
It screws up the SNLR that we, the daily papers and monthly pundits look at and that CREA incorporates into their monthly data (that recently has been used by the Bank of Canada in their 1/4ly Monetary report as a “housing market” indicator.
Let’s smarted up!
Don’t forget that TRREB allows each Terminate and relist (same brokerage, same property and same owner within the timeframe of the initial listing) to be counted EACH time as a NEW Listing.
I pointed it out a couple of Annual Meetings ago and a few folks in the (members only) audience had never heard of the Re-List Share Comparison Chart that TRREB published (around lunchtime) within the Market Stats (2nd from right circle on main landing page).
Recently approx 30% of the Published-as New Listings Total on Market Watch are Do-Overs.
It screws up the SNLR that we, the daily papers and monthly pundits look at and that CREA incorporates into their monthly data (that recently has been used by the Bank of Canada in their 1/4ly Monetary report as a “housing market” indicator.
Let’s smarten up!
The real problem is that the majority of Canadians are tapped out. Carrying huge debt loads they are just managing to service. Or in many cases are unable to carry. Not to mention that as supply continually increases, despite the “do over” listings, values will continue on a downward trend. Which is another important part of the affordability equation. Unfortunately this will put many seller’s deeper under water as they have no equity in the homes they purchased during the height of the market. A prudent buyer will continue to wait out the market. A more accurate prediction is that in 2025 seller’s may have to walk away from their homes. POS will increase resulting in real estate values on a downward trend. The Feds and Liberals have been walking a tight rope to try and keep values high, as there is so much debt tied in with consumers homes. Think about HELOCs. This is the “I want it now era” consumers have been using credit to buy the luxury items they believe they want. The “don’t pay a cent” promotions putting consumers in further debt. Once the Liberal lose the next election Canadians will find out how bad things really are in Canada.