Is Canada’s real estate market really diverging into two separate camps – the urban centres that are supply-constrained and in high demand, and cities with too much to sell and too few buyers?
Sitting in this latter camp are Toronto and Vancouver, which are our most expensive cities but suffering from oversupply and constrained spending power.
Compounding the problem for these two cities is the condo segment, which appears to have hit a wall in terms of value expectations.
Transactions nationally are 3.5% higher year-over-year – thanks in part to seven successive interest rate cuts.
Prices are down nationally, albeit by just 0.2% in June compared with May. The dragging anchors have been Toronto and Vancouver. However, value increases have been recorded in other major centres, such as Quebec City (16.4%), St. John’s (12.3%), Winnipeg (7.5%), Montreal (7.3%) and Saskatoon (7.3%).
Here is a breakdown of four of our most influential real estate markets, using MLS data from the Canadian Real Estate Institute (CREA).
Toronto – Our biggest and most expensive market has rarely been more affordable, some say for decades. In June, the annual price average year-over-year was down 5.5% ($58,000). Its condo market is -8% adrift. With affordability at a rare high, buyers are out in force. Deals were up 8.1% in June compared with May. It’s a great time if you want to upsize.
Montreal – The good people of Montreal don’t share the same enthusiasm for a deal as Toronto folks. Transactions were down 2% in June – a third straight fall. New listings have dipped 7%. It’s a good time to explore the market if you’re an upsizer or first-home buyer.
Vancouver – The city needs to break free from its pattern of value declines. It’s had four negative months in a row. Values are down -2.8% from a year ago, while listings were at a 13-year high in June. This is an awesome time to upsize. The surfeit of inventory will take time to dissipate, but when it does your opportunity will have gone.
Calgary – Prices have fallen 3.6% on a year ago, but they’re following a strong period for local real estate. While the Royal Bank of Canada says the market is balanced, the release of new housing is up 20% on a year ago. Calgary will need to continue to attract new residents to avoid oversupply and additional price pressure.