Market Watch - Residential Resale Market begins to Normalize

As expected, housing market activity is calming to start the second half of 2021. 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. 

We have seen market activity transition from a record pace to a robust pace over the last three months. While this could provide some relief for home buyers in the near term, a resumption of population growth based on immigration is only months away. 

Ontario - Residential Resale Market begins to Normalize


Toronto,  05 July 2021 - June home sales were up compared to last year, but remained below the March 2021 peak and were lower than the number of transactions reported for May 2021, consistent with the regular seasonal trend. The average selling price in June increased by double digits compared to last year as well, but the annual rate of increase moderated compared to the previous three months.

Greater Toronto Area REALTORS® reported 11,106 sales through TRREB’s MLS® System in June 2021 – up by 28.5% compared to June 2020. Looking at the GTA as a whole, year-over-year sales growth was strongest in the condominium apartment segment, both in the City of Toronto and some of the surrounding suburbs. On a month-over-month basis, both actual and seasonally adjusted sales continued to trend lower in June.

“We have seen market activity transition from a record pace to a robust pace over the last three months. While this could provide some relief for home buyers in the near term, a resumption of population growth based on immigration is only months away. While the primary focus of policymakers has been artificially curbing demand, the only long-term solution to affordability is increasing supply to accommodate perpetual housing needs in a growing region,” said TRREB President Kevin Crigger.

In all major market segments, year-over-year growth in sales well outpaced growth in new listings over the same period, pointing to the continuation of tight market conditions characterized by competition between buyers and strong price growth. On a month-over-month basis, both actual and seasonally adjusted average prices edged lower in June.

The June 2021 MLS® Home Price Index composite benchmark was up by 19.9% year over year. The average selling price for all home types combined was up by 17% over the same time period to $1,089,536. While price growth continued to be driven by the low-rise segments of the market, it is important to note that the average condominium apartment price was up by more than eight% compared to June 2020, well outstripping inflation.

 

June’s Residential Resale Market begins to Normalize

Ottawa, July 6, 2021 - Members of the Ottawa Real Estate Board sold 2,131 residential properties in June through the Board’s Multiple Listing Service® System, compared with 2,038 in June 2020, an increase of 5%. June’s sales included 1,647 in the residential-property class, up 2% from a year ago, and 484 in the condominium-property category, an increase of 13% from June 2020. The five-year average for total unit sales in June is 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. This is a normal tapering off as families turn their attention to end of school events and enjoying more outdoor recreation. This year, it also coincided with some easing of pandemic restrictions,” states Ottawa Real Estate Board President Debra Wright. “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.”

“Year-to-date sales are tracking 48% higher than last year at this time with 11,446 properties changing hands and are 16-18% higher than 2018 and 2019. Much of this increase is due to the increased activity in the first five months of 2021 compared to previous years. We have also seen an instrumental increase in new listings this year, and inventory levels for both residential and condominiums are higher than we’ve seen since 2017. However, we are still at a one month supply of housing stock, so we aren’t out of the woods yet.”

June’s average sale price for a condominium-class property was $435,198, an increase of 21% from last year, while the average sale price for a residential-class property was $725,970, an increase of 26% from a year ago. With year-to-date average sale prices at $734,357 for residential and $422,734 for condominiums, these values represent a 33% and 20% increase over 2020, respectively.*

“For the moment, there are signs that we’ve reached a levelling out, especially as it relates to average prices which, in recent months, have not experienced the drastic increases of earlier in 2021, nor are we seeing a drop,” notes Wright.

“Properties are not moving as quickly as they were. Inventory has picked up; there is less scarcity and more choices – consequently, less upward pressure on prices. Additionally, we are noticing fewer of the multiple offer frenzy situations. Of course, many properties do still have multiple offers, but our REALTORS® are noticing that there are less of them on offer day.”

“This start of a perhaps equilibrium in the market is good news for Buyers, while Sellers are going to have to adjust to this new normal and be more strategic in their positioning. Whichever side of the transaction you are on, you will bode well by listening and heeding the advice of a professional REALTOR® who has their pulse on the day-to-day variabilities Ottawa’s resale market is experiencing,” Wright suggests.

OREB Members also assisted clients with renting 2,252 properties since the beginning of the year compared to 1,512 at this time last year.

 

Britsh Columbia - Housing Market Activity Normalizing After a Frenetic Year

Vancouver, BC – July 12, 2021 -- The British Columbia Real Estate Association (BCREA) reports that a total of 11,070 residential unit sales were recorded by the Multiple Listing Service® (MLS®) in June 2021, an increase of 34.7% over June 2020. The average MLS® residential price in BC was $910,445, a 22.2% increase from $745,194 recorded in June 2020. Total sales dollar volume was $10.1 billion, a 64.6% increase from last year.

“As expected, housing market activity is calming to start the second half of 2021,” said BCREA Chief Economist Brendon Ogmundson. “That said, while down from record highs earlier this year, home sales across the province remain well above long-run average levels"

Total active residential listings were down 23.4% year-over-year in June and continued to fall on a monthly seasonally adjusted basis.

Year-to-date, BC residential sales dollar volume was up 161.6% to $64.7 billion, compared with the same period in 2020. Residential unit sales were up 114.3% to 70,690 units, while the average MLS® residential price was up 22.1% to $915,563.

 

Alberta - Supply trends up, but the market still favours the seller

City of Calgary, July 2, 2021 – Calgary’s housing market is showing few signs of letting up, as sales reached 2,915 units in June – a record high for the month.

“It is taking time for supply to catch up with the demand in the market,” said CREB® chief economist Ann-Marie Lurie.

“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 continue to see in June. At the same time, gains in inventory are taking some pressure off the market as it starts to trend towards more balanced conditions.”

New listings in June totalled 4,135, the second-highest level ever recorded for the month. This caused inventories to trend up to 6,918 units. While this is higher than longer-term averages, it was balanced by strong sales and the months of supply remained relatively tight at 2.4 months. However, this is still an improvement from earlier in the year when the months of supply was below two.

As the market moves toward more balanced conditions, we are also starting to see the pace of price growth slow. The benchmark home price continued to trend up in June, but the monthly gain slowed to less than one%. While the pace of growth is slowing, as of June, the benchmark price was 11% higher than levels recorded last year.

HOUSING MARKET FACTS

Detached: Despite some modest improvements in inventory levels, strong sales in June have kept the detached sector of the market firmly in sellers’ market conditions.

With a sales-to-new-listings ratio of 76% and the months of supply below two months, benchmark home prices continue to rise. The unadjusted detached benchmark price totalled $537,200 in June, nearly one% higher than last month and 13% higher than last year’s levels.

Despite the sellers’ market conditions in the detached sector, there is some variation depending on location. The districts with the strongest demand relative to supply are the North, North West, South, South East and East districts. Each of these districts has less than two months of supply in June, which is well below longer-term averages. The tightness in these areas has also resulted in the highest year-over-year price gains.

The City Centre has not experienced the same tight conditions as other districts and is the only district where detached prices have yet to recover from previous highs.

Semi-Detached:  The pace of semi-detached sales growth is showing some signs of slowing, but year-to-date sales remain at record highs. New listings have also reached new highs so far this year. However, the growth in sales has outpaced the growth in new listings, preventing any significant shift in inventory levels.

With 592 units in inventory in June, levels have trended up from the start of the year. However, with the months of supply currently sitting at two-and-a-half months, conditions continue to favour the seller.

The persistent sellers’ market conditions have caused benchmark prices to trend up, reaching $427,000 in June. Gains have occurred across all districts so far this year, but the amount of growth has ranged from a low of less than five% to a high of nearly 10%. Despite these gains, only the North, West and South East districts have seen prices recover to previous highs.

Row:  After the first half of the year, row sales totalled 2,045, their highest mark since 2007. Those sales have been met with record-high new listings. This has caused inventories to trend up over recent months to levels higher than what we typically see at this time of year.

The higher inventories have not been a problem, as they’ve been balanced by strong sales. The month of supply remains below three months and this sector continues to favour the seller. Recent gains in the months of supply are helping the market move toward more balanced conditions, but it is too soon to see the shift impact pricing.

In June, citywide row prices totalled $299,300, one% higher than last month and nine% higher than last year’s levels. Prices have improved across most districts, but they remain well below previous highs.

Apartment Condominium: Recent price gains have encouraged more people to sell their condominiums this year, causing both new listings and overall inventories to increase relative to the previous year. At the same time, relative affordability has supported sales totals that have improved from the exceptionally low levels recorded over the previous six years.

The result has been inventories that remain elevated compared to historical levels, but strong sales have helped bring the months of supply down to levels more consistent with balanced market conditions.

The balanced conditions have been supporting some price recovery in the market. Prices have trended up over the first half of the year and on a year-to-date basis they currently sit nearly three% higher than last year.

Prices have risen across all districts, but the largest price gain occurred in the West district. However, overall, prices remain nearly 15% below previous highs.




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