July 19, 2017

Prices Down And Crickets Echoing Through Open Houses

A report from Bloomberg on Canada. “Canada’s hottest housing market is definitely cooling down. Total home sales in Greater Toronto dropped to 5,977 in June, the lowest level since 2010 and down 15.1 percent from the month prior, data from the Canadian Real Estate Association show. Average prices are down 14.2 percent since March — the fastest 3-month decline in the history of the data back to 1988 — while the ratio of sales to new listings sits at its lowest level since 2009. Prices and sales also fell in nearby regions such as Hamilton-Burlington and Kitchener-Waterloo, CREA data show.”

“Sales also fell 4 percent from the previous month in Vancouver, the country’s other hot real estate market, to 3,047 residential units. Greater Vancouver remains Canada’s most expensive market with an average price of C$1.04 million, down 3.2 percent from May. Sales fell most sharply in Regina, which was down 27.3 percent. ‘The Canadian housing market is chock full of unique stories, both positive and negative,’ Bank of Montreal economists Doug Porter and Robert Kavcic wrote in a research note. Ontario’s changes ‘have worked to alter market psychology — and that is a positive outcome given the speculative dynamics in place a few months ago.’”

From Global News. “Sales of existing homes fell by over 15 per cent in Toronto, the second straight double-digit decline, with resale activity now down by a whopping 42 per cent from its March peak, TD economist Diana Petramala wrote in a brief note to clients. The ratio of sales compared to new home listings fell below 40 per cent in Toronto, the statistics show. In March, by comparison, the ratio stood at 86 per cent, meaning homes were being snatched up pretty much as soon as the ‘for sale’ sign went up. ‘According to this metric, Toronto has now fully moved from sellers’ territory (ratio above 60 per cent) to buyers’ territory (ratio under 40 per cent),’ Petramala wrote.”

“‘The higher end of the Toronto market (call it $1.5 million plus, for argument’s sake) has gone stone cold, with prices now edging down and crickets echoing through open houses,’ BMO economist Robert Kavcic noted in a different email to clients.”