Posthaste: After a blistering spring, Canada’s hottest real estate markets show signs of tapering off

Article content

Good morning!

Article content

It’s not just Toronto and Vancouver, Canada’s other housing markets are also showing signs of normalizing after a manic spring.

Home sales in Toronto declined 9.1 per cent in June from the month before to 8,885 transactions, the third consecutive monthly decline, according to the Toronto Regional Real Estate Board, although prices remained unchanged. Similarly, the Real Estate Board of Greater Vancouver (REBGV) saw 3,762 sales in June, an 11.9 per cent decrease compared to the homes sold in May 2021. The price of an average home edged up 0.2 per cent in June compared to the previous month.

Article content

The cooling effect is cascading across Canada. In Calgary, house sales reached 2,915 units in June — a record high for the month — but the supply side also increased notably, according to data from the Calgary Real Estate Board. The city saw 4,135 new listings — the second-highest level recorded for June — and inventories trended up to 6,918 units.

Article content

While the months of supply is “relatively tight,” at 2.4 months, the board said it was an improvement from earlier this year when that figure was below two months.

“Through the early spring market, many buyers did not have a lot of choice, but the recent improvements in supply are providing more options for those purchasers and supporting the strong sales we continued to see in June,” said CREB chief economist Ann-Marie Lurie. “At the same time, gains in inventory are taking some pressure off the market as it starts to trend towards more balanced conditions.”

The board said it was beginning to see the pace of price growth slow in the city as the market moved toward more balanced conditions, with the monthly price gain slowing to less than one per cent. However, CREB added, the benchmark price last month, of $458,300, was 11 per cent higher than levels recorded in June 2020.

Article content

In the capital, Ottawa realtors sold 2,131 residential properties in June. It was just a five per cent increase from the same month last year — of 2,038 — and in line with the five-year average for total unit sales in June, of 2,098.

“June’s resale market performed similar to a typical (pre-pandemic) June, with unit sales on par with the five-year average and a lower volume of activity compared to May, particularly in the last two weeks of the month,” said Ottawa Real Estate Board president Debra Wright, noting this was a normal “tapering off” as families turn their attention to summer fun.

“It will be interesting to watch the market over the summer to see if this normalization of the real estate sales ebb and flow is indeed the case moving forward. Last year, summer resales skyrocketed due to pent-up demand when the first lockdown ended.”

Article content

Wright noted the city had seen an “instrumental” increase in new listings this year, and inventory levels for both homes and condominiums reached their highest levels since 2017.

But, the board added, year-to-date sales are 48 per cent higher than last year at this time, largely due to the flurry of activity in the first five months of this year, and Ottawa’s housing stock still sits at a one-month supply. “We aren’t out of the woods yet,” Wright said.

Meanwhile, in la belle province, sales in the Montreal census metropolitan area fell “significantly” in June to 4,619 — a decrease of seven per cent from last year. “This confirms a downward trend in sales that has been evident since early spring,” said the Quebec Professional Association of Real Estate Brokers.

Article content

But this decrease wasn’t uniform — sales on the Island of Montreal increased 11 per cent from June 2020, driven largely by condo sales, while the peripheral areas decreased.

The QPAREB said the overall drop was primarily caused by a historic shortage of single-family homes for sale and a sharp increase in prices. The median price of single-family homes reached $508,000, $365,000 for condos and $703,000 for small income properties known as plexes — 29 per cent, 20 per cent and 16 per cent increases, respectively.

“We must also take into account the potential impact on sales caused by the easing of some of the effects of the health crisis and the introduction of a new federal measure aimed at calming the real estate market by limiting buyers’ borrowing capacity somewhat,” said Charles Brant, director of the QPAREB’s market analysis department.

Article content

_____________________________________________________________

Was this newsletter forwarded to you? Sign up here to get it delivered to your inbox.
_____________________________________________________________

Article content

___________________________________________________

• The Canadian Travel and Tourism Roundtable is hosting a press conference in Ottawa requesting that the federal government hold off on sending Canadians to the polls until a comprehensive reopening plan is announced.
• Marie-Claude Bibeau, minister of agriculture and agri-food, will announce investments to support productivity and competitiveness in the dairy sector through innovation and modernization in Saint-Gedeon, Quebec.
• The Assembly of First Nations holds its annual general assembly and an election for national chief.
• The parliamentary budget officer will post a new legislative costing note entitled “Extending the temporary enhancements to the Work-Sharing program for employers and employees affected by COVID-19.
• As a prelude to Nunavut Day celebrations, the Nunavut Planning Commission (NPC) will hold a news conference to release its updated 2021 Draft Land Use Plan.

Article content

___________________________________________________

_______________________________________________________

Article content

___________________________________________________

____________________________________________________

____________________________________________________

Today’s Posthaste was written by Kelsey Rolfe (@kelseyarolfe), with additional reporting from The Canadian Press, Thomson Reuters and Bloomberg.

Have a story idea, pitch, embargoed report, or a suggestion for this newsletter? Email us at posthaste@postmedia.com, or hit reply to send us a note.

Listen to Down to Business for in-depth discussions and insights into the latest in Canadian business, available wherever you get your podcasts. Check out the latest episode below: