The National Picture
Posted by John Vernon & Associates on
For the most part, the real estate market in Canada has languished over the past couple of years. For example, in 2018, national sales were down nearly -5% from the preceding year and the average sale price of a residential property was down -4.1%. (This decline was largely attributable to a price decrease of -4.4% in Greater Toronto, Canada’s largest real estate market.) However, there are strong indications that the recent decline in housing prices, lower mortgage rates and continued population and economic growth, have led many prospective buyers to return to the real estate market in some areas of the country in the latter part of 2019.
In 2019, residential listings on the Canadian MLS® totalled 818,172, down -2.1% from 835,512 in 2018. There were 488,628 sales in 2019, up +6.5% from 459,032 sales in 2018. The value of MLS® residential sales in Canada was $244.9 billion, up +9.1% from $224.4 billion in 2018. The sales-to-new-listings ratio (a measure of market strength) was .60, up from .55 in 2018. The average sale price of residential properties in Canada was $500,938 in 2019, up +2.5% from $488,871 in 2018 but down -1.7% from the record high of $509,812 in 2017. The price increase in 2019 was largely attributable to an increase of +4.0% in Greater Toronto, which offset a decline of -5.9% in Vancouver, Canada’s second largest market.
Generally speaking, most Canadian cities experienced balanced market conditions. Toronto, Hamilton, Ottawa, Montreal, Quebec City and Halifax/Dartmouth enjoyed solid price increases. Most other areas experienced relatively modest declines in sale prices. Market conditions remained particularly weak in many of the prairie cities and Newfoundland/Labrador.
The Canadian Real Estate Association (CREA) is forecasting that sales will strengthen and prices will show substantial gains in 2020. Nationally, residential MLS® sales are forecast to increase +8.9% to 529,900 units in 2020, and the average sale price will increase +6.2% to about $531,000. The Canada Mortgage and Housing Corporation (CMHC) forecast, released in September 2019, forecasts an increase in MLS® sales and prices in 2020. CMHC reports an easing of “overvaluation” concerns with the markets in Vancouver and Toronto and those in their vicinity. It expects the housing markets to benefit from generally favourable economic and demographic conditions. These include: an increase in household income, continued growth in
household formation and a stable interest rate environment. CMHC is forecasting stronger market conditions with resulting residential MLS® sales of between 480,600 and 497,700 units in 2020 and an average sale price of between $506,200 and $531,000.