There are many signs of the Canadian market improving, but the biggest signal everyone wants to see is an upward shift in value trends – and that seems to be a few months away.
A rising level of inventory of homes for sale is keeping a lid on prices. This is despite the Bank of Canada reducing the overnight rate for an eighth time to stand at 2.5%.
Its easing of monetary policy has helped set retail mortgage rates at between 4.5% to 6%, depending on the deal.
The MLS Home Price Index registered a month-over-month fall of 0.1%, which was influenced by two markets with an over-supply of inventory – Ontario and British Columbia.
We’ve now seen prices drift for eight of the past nine months. Nevertheless, the national average price is $664,078, according to the Canadian Real Estate Association (CREA).
Home resales rose 1.1% in August compared with July figures.
Here’s a breakdown of key metropolitan areas:
Toronto – Resales dipped for the first time in months, slipping 1.8% in August, although year-over-year transactions are up 2.8%. The average price sits at $978,100. With the latest interest rate cut, analysts believe Toronto will soon bounce back. So, it’s a good time to buy. Anyone considering a sale should start to prepare their homes to catch the coming wave of optimism.
Montreal – The sellers are back and that’s created an 8% jump in inventory and a 5% increase in the number of deals. Supply remains tight, which has given the city an opportunity to begin a sustainable recovery. Compared with 12 months ago, the median price for a family home is 7.3% higher. Condos are up 3.7%.
Vancouver – Resales were up 6% in August compared with July. That’s a third successive month of good news on that front. The city has more properties for sale than at any time in the last decade. That’s good news for buyers. However, analysts suggest conditions will soon even out to create a balanced market for both seller and buyer.
Calgary – More deals are getting done – +8.1% compared with July – but the local MLS Home Price Index shows a drop of 4.1% in values compared with 12 months ago. Analysts at the Royal Bank of Canada (RBC) say easing economic concerns should help bolster the market in the medium term.