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In the past few months, buyers have delisted much faster than sellers. The ratio of home sales to listings (SNLR) fell sharply in April, both nationally and in several major markets, according to the Canadian Real Estate Association (CREA).
SNLR is the ratio of housing sales to listing, and it is a key index in the relationship between supply and demand in the housing market. In a market where the number of sellers exceeds the number of sellers, house prices are usually bearish and vice versa. The SNLR ratio is between 40% and 60%, which is a balanced market; more than 60% is a seller’s market and house prices are bullish; less than 40% is a buyer’s market and house prices are bearish.
SNLR is only a market trend index, each city buyer reflects the ratio varies, high and low, the key depends on the ratio fluctuation speed. If the ratio fluctuates rapidly, the future trend of house prices can be judged from the change of its direction.
The ratio rises rapidly, although it is still a buyer’s market, but house prices are still bullish, because when the ratio rises rapidly, it means that it will soon enter the seller’s market, and house prices will rise again and again, and vice versa. In the process, market psychology will play a role in adding fuel to the flames, therefore, when the ratio fluctuates sharply, we must pay close attention to it, and then combine with other indexes to draw our own conclusions.
The SNLR ratio has fallen sharply in the past few months, from 75.2% in April to 6.1% in March, down from 90.87% in January. In other words, although the SNLR ratio is still quite high, but the decline is also quite alarming, only 9 major cities in the country SNLR ratio increased.
Ottawa’s SNLR ratio fell the most, falling 25.6 per cent to 75.6 per cent in April compared with March, followed by Gatino, which fell 16.7 per cent to 77.8 per cent over the same period, followed by Hamilton, down 15.8 per cent to 72.5 per cent. House prices in these three cities have been soaring, and buyers are eager for this bucket of ice water to cool the hot market.
By contrast, the ratio of several small cities is on the rise. For example, the SNLR ratio of Saguenay rose by 22.2% to 112.2%, St. John by 12% to 96% and Lei Wan by 10.8% to 100.4% over the same period.
In the two largest cities, Toronto and Vancouver, the SNLR ratio also fell sharply over the same period, with Toronto falling 6.2 per cent to 65.9 per cent and Vancouver falling 12.2 per cent to 68.1 per cent, which is still slightly higher than Toronto. Although the SNLR ratio in the two places is still high, it has slowed down compared with that of a few months ago.
Nationwide, housing supply is still tight and house prices are still soaring rapidly, but home sales have fallen much faster than the rate of listing, and this trend has been going on for several months, indicating that the most tight period in the market is over. the rise in house prices is likely to slow soon. Judging from the current rise in house prices, there is still enough cushion even if house prices fall.