7481 Woodbine Ave #203, Markham, ON L3R 2W1 (647) 806-8188
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At least in terms of the number of transactions, the Canadian housing market seems to be getting back on its feet. In recent months, the dramatic decline in house resales has moderated substantially. Even February data showed a tiny 2.3% gain over January, rising to 403,400 units (annualized). We believe it indicates a near-term bottom for many local markets. Notwithstanding this, the price adjustment continues for the time being. In February, the national composite MLS home price index decreased 1.1% m/m, marking the twelfth consecutive monthly loss. The rate slowed from an average of -1.5% over the previous six months, but the overall trend is still clearly downward, particularly in Ontario and British Columbia.
A sharp drop in new listings and a tightening of the demand-supply balance in February may be a sign that price drops will slow down in the coming months. If this trend keeps up, it would give us more reason to think that prices will bottom out in the summer or soon after (timing depends on the market).
Last month’s 7.9% drop in the number of properties listed for sale was startling. Contrary to expectations that rising interest rates would induce a rush of sellers, the opposite occurred. Specifically, markets in Ontario and British Columbia (which are presumably under more pressure from rising interest rates) reported the largest declines. Notwithstanding the fact that this was a continuation of a well-established downward trend over the last year, we think that the size of the February swing was an outlier.
Last month, buyers brushed aside any supply decline. Resales increased in every major market, including Vancouver (15.2% m/m), Calgary (2.4%), Regina (6.7%), Toronto (8.5%), Ottawa (2.5%), Montreal (3.7%), and Halifax (2.4%). Yet, these rises did nothing to change the larger picture: activity remains largely down, in some instances at levels not seen in decades (excluding the shutdown period).
Last month’s 7.9% drop in the number of properties listed for sale was startling. Contrary to expectations that rising interest rates would induce a rush of sellers, the opposite occurred. Specifically, markets in Ontario and British Columbia (which are presumably under more pressure from rising interest rates) reported the largest declines. Notwithstanding the fact that this was a continuation of a well-established downward trend over the last year, we think that the size of the February swing was an outlier.
Last month, buyers brushed aside any supply decline. Resales increased in every major market, including Vancouver (15.2% m/m), Calgary (2.4%), Regina (6.7%), Toronto (8.5%), Ottawa (2.5%), Montreal (3.7%), and Halifax (2.4%). Yet, these rises did nothing to change the larger picture: activity remains largely down, in some instances at levels not seen in decades (excluding the shutdown period).
7481 Woodbine Ave #203, Markham, ON L3R 2W1 (647) 806-8188