Last year’s hottest real estate markets, are this year’s fastest cooling ones. Canadian Real Estate Association (CREA) numbers show the majority of markets saw the sales-to-new listings ratio (SNLR) decline significantly in April. There were a few markets that are seeing the ratio rise, almost all located East of Toronto. The fastest cooling markets were around the Greater Toronto region.
Sales-To-New Listings Ratio (SNLR)
The sales-to-new listings ratio (SNLR) is the indicator that CREA uses to determine a buyer’s or seller’s market. When the SNLR is between 40 and 60 percent, the market is considered balanced. Above the range is a seller’s market. This is when sellers can start demanding more concessions, like higher prices. Below the range is a buyer’s market. This is where buyers can start demanding more concessions, like lower prices. Over the past ten years, Canadian markets have averaged 53.4%. Last year’s numbers were irregular for the whole country.
The indicator is helpful, but it’s not perfect. When the indicator is moving quickly (fast rising or falling), the “buyer’s” or “seller’s” labels may not apply. Sometimes the indicator makes a brief pit stop in the range, before heading to where it needs to be. It’s a great indicator, but it should be your starting point for investigating market trends – not your conclusive evidence. That said, let’s look at the numbers.
Canadian Real Estate Markets With The Fastest Rising SNLR
The regions with the fastest rising SNLR are all East of Toronto. Ottawa is the fastest rising market with a SNLR of 67.6%, up 17.16% from last year. Halifax has the second fastest rising SNLR with a ratio of 60.7%, up 14.96% from last year. Montreal is in third with a ratio of 65.9%, up 14.01% from last year. These markets did have a big jump, but all three of them barely climbed into seller’s market territory.
Canadian Real Estate Sales-To-New Listings Ratio – April 2018
The ratio of sales to new listings for Canadian real estate markets with more than 500 sales in April 2018.
Source: CREA, Better Dwelling.
Greater Toronto Real Estate Markets Have The Fastest Falling SNLR
On the flip side of the market, Greater Toronto and its economic suburbs experienced the biggest declines in SNLR. Toronto led the pack with a ratio of 46.4%, down 36.18% from last year year. Niagara did slightly better with a ratio of 62.8%, a 29.2% decline from last year. Hamilton saw the third largest drop with a ratio of 60.4%, a 28.94% decline. The concentration in the region is likely to have a stronger impact on the region’s economy.
Canadian Real Estate SNLR Percent Change – April 2018
The percent change of SNLR for Canadian real estate markets with more than 500 sales in April 2018.
Source: CREA, Better Dwelling.
Canadian markets are shifting to restore balance across the country. Markets with the fastest rising SNLR, didn’t enjoy the massive sales volume the year before. These markets are just entering into seller’s market territory, and starting to warm up. The markets with the fastest declining SNLRs are located in regions that were overheated last year. The movements are largely expected, but that won’t stop people from being surprised.
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