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Home Price Moderation Has Begun in Some Metro Areas

By: Steve Huebl  Source : Canadian Mortgage Trends

Housing figures from March reveal the early signs of a slowdown, particularly in the Toronto market.

Despite the third-best March on record, and competition in the Greater Toronto Area remaining strong, the market “did experience more balance in the first quarter of 2022 compared to last year,” said Jason Mercer of the Toronto Regional Real Estate Board.

Real estate analyst Ben Rabidoux of Edge Realty Analytics agrees, writing “the signposts of a slowdown in Toronto are now clear if you know where to look.”

For example, seasonally adjusted home sales were down 18.6% from February, reaching the lowest levels since June 2000. At the same time, there was a build-up in inventory, with new listings up about 30% compared to the 10-year average, despite being down compared to the record figures from last March, Rabidoux said.

Sales are expected to “fall significantly” once the current pool of buyers with 90-day rate holds is exhausted, he added. “These folks have mortgage approvals at rates up to 100bps below current levels, and they are highly motivated to transact.”

As for some of the other metro markets, sales in Vancouver are down from last year, although the city hasn’t seen the same supply response compared to Toronto, Rabidoux noted. Meanwhile, “Alberta continues to impress. Sales are simply off the charts with no end in sight.”

Here’s a look at the March statistics from some of the country’s largest regional real estate boards:

Greater Toronto Area
Sales: 10,955

-30% (YoY)
+20.4% month-over-month (MoM)
MLS Home Price Index: $1,299,894

+19.6% (YoY)
-2.6% (MoM)
New Listings: 20,038

-11.9% (YoY)
+41.6% (MoM)
“Competition between home buyers in the GTA remains very strong in most neighbourhoods and market segments,” said TRREB Chief Market Analyst Jason Mercer. “However, we did experience more balance in the first quarter of 2022 compared to last year. If this trend continues, it is possible that the pace of price growth could moderate as we move through the year.”

Source: Toronto Regional Real Estate Board (TRREB)

Greater Vancouver Area
Sales: 5,708

-23.9% YoY
+67% MoM
MLS Home Price Index for all property types: $1,360,500

+20.7% YoY
+3.6% MoM
New Listings: 6,673

-19.5% YoY
+22% MoM
“March of 2021 was the highest selling month in our history. This year’s activity, while still elevated, is happening at a calmer pace than we experienced 12 months ago,” said Daniel John, Chair of the REBGV. “Homebuyers are keeping a close eye on rising interest rates, hoping to make a move before their locked-in rates expire.”

Source: Real Estate Board of Greater Vancouver (REBGV)

Montreal Census Metropolitan Area
Home Sales: 5,493

-13% YoY
+25% MoM
Median Price (single-family detached): $565,500

+18% YoY
+2.8% MoM
Average Price (condo): $381,000

+16% YoY
+5.7% MoM
New Listings: 7,217

-9% YoY
+47% MoM
“The month of March has been characterized by a renewed increase in prices, around 17 per cent, for all categories combined, when compared to the same period last year. This new feverish surge, against a backdrop of overbidding, may be one of the very last ones,” said Charles Brant, Director of Market Analysis at QPAREB.

“The new increase in key interest rates anticipated for April 13th should help calm things down as more selling homeowners may put their property on the market to take advantage of a still very favourable market climate. However, in this context of rising rates, the pool of potential buyers is shrinking, while prices are reaching new highs.”

Source: Quebec Professional Association of Real Estate Brokers (QPAREB)

Sales: 4,107

+41.5% YoY
+24% MoM
Benchmark Price (all housing types): $518,600

+17.6% YoY
+3.8% MoM
New Listings: 5,485

+23.5% YoY
+18% MoM
“While supply levels have improved from levels seen over the past four months, inventory levels are still well below what we traditionally see in March, thanks to stronger than expected sales activity. With just over one month of supply in the market, the persistently tight market conditions continue to place significant upward pressure on prices,” said CREB Chief Economist Ann-Marie Lurie.

“Despite the strong start to the year, price gains and rising lending rates are expected to weigh on demand in the second half of this year.”

Source: Calgary Real Estate Board (CREB)

Sales: 2,011

-12% YoY
+41.5% MoM
Average Price (single-family detached): $853,615

+13% YoY
+1.9% MoM
New Listings: 2,632

-6% YoY (but +5% compared to the 5-year average)
+49% MoM
“Although the number of sales in March decreased from last year at this time, it was still a robust and busy start to the spring season…March tends to be the early indicator of the spring resale market pace, so we anticipate April’s numbers will be a better indication of just how the spring market will perform, which tends to be the peak time of year for resales,” said Ottawa Real Estate Board President Penny Torontow.

“It is encouraging to see new inventory entering the resale market. However, these properties are being quickly absorbed due to the unrelenting high demand, and more listings are crucial to meeting this need.”

Source: Ottawa Real Estate Board (OREB)