Canada

Canadian Home Sales Fall Over 39%, With Toronto Leading The Market Lower

Canadian real estate sales aren’t falling as much as the month before, but remain substantially lower. Canadian Real Estate Association (CREA) data shows home sales fell in every major market in May. The decline in sales was smaller than the month before, but still remains at one of the lowest volumes in decades. Even CREA reminded the industry just a third of the volume returned from pre-pandemic levels.

Canadian Real Estate Sales

The unadjusted sales for all home types, as reported through the Canadian MLS.

Source: CREA, Better Dwelling.

Canadian Real Estate Sales Dropped Over 39%

Canadian real estate sales are still at a multi-decade low for volumes. There were 33,051 home sales in May, up 60.20% from a month before. This represents a decline of 39.8% compared to the same month last year. Monthly increases are expected, but annual declines are not.

Canadian Real Estate Sales Change

The annual percent chage of unadjusted sales for all home types, as reported through the Canadian MLS.

Source: CREA, Better Dwelling.

The year-over-year decline is getting smaller as buyers get used to life in a pandemic. Last month’s 39.8% decline is substantially smaller than April’s 57% decline. However, it’s still one of the biggest declines in history, so don’t underestimate it. CREA emphasized this in their report, “May’s gain constituted a return of only a third of the activity lost between February and April.”

March Canadian Real Estate Sales

The number of sales reported through the Canadian MLS in the month of March.

Source: CREA, Better Dwelling.

Quebec City Real Estate Made The Smallest Decline

There were no gains last month, but some markets did fall a little less than others. Quebec City sales fell to 804 in May, down 6.6% from the same month last year – the smallest drop of any market. Winnipeg was in second with 241 sales, down 23.3% over the same period. In a distant third is Edmonton with 1,320 sales, down 39.9% from last year.

Canadian Real Estate Sales By Market

Canadian real estate sales breakdown for selected markets.

Source: CREA, Better Dwelling.

Toronto Real Estate Made The Biggest Sales Decline

The biggest drops in Volume occurred in Toronto, Halifax, and Fraser Valley. Toronto reported 4,606 sales in May, down 53.9% from last year. Halifax follows with 445 sales, down 47.3% from last year. Fraser Valley comes in third with 766 sales, down 46.9% from last year. All three of these markets showed smaller declines than the month before.

Canadian Real Estate Sales Change By Market

The percent change in Canadian real estate sales for selected markets.

Source: CREA, Better Dwelling.

Notably not at either end of the spectrum was Montreal and Vancouver. Montreal reported 3,286 sales in May, down 40.9% from last year. Vancouver reported 1,506 sales, down 43.6% over the same period. Both regions were in the middle of the scale for declines, but worse than the average for the whole country.

The year-over-year declines for home sales are getting smaller, but remain substantial. Compared to a month before, it seems buyers are more comfortable shopping in a pandemic. However, this increase still puts the annual declines at one of the biggest in history. As the year goes on, we can expect pandemic fears to subside and sale volume declines to continue lower. However, Canada’s national housing agency doesn’t expect sales to recover until after 2022.

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7 Comments

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  • Marc 1 month ago

    I cannot for the life of me understand why MSM is focusing on the M/M increase, since it looks like it always increases from April to May.

    • Jason Chau 1 month ago

      Good read.

      “While a modest recovery appears to be under way, alongside the broader markets, some investors are cautious about getting into the real estate sector right now – particularly office and commercial properties that are expected to feel long-term effects from COVID-19 lockdowns that shuttered restaurants and retailers and emptied office buildings”

      https://www.theglobeandmail.com/featured-reports/article-why-investors-should-be-wary-of-the-reit-etf-rally-consider-niche/

      If the value of office space disappears, so does the value of being located beside them. Smaller cities are going to be where the value investing is .

    • Balky Bartokamous 1 month ago

      I can’t for the life of me understand why anyone thinks sales numbers mean anything in the current climate. I mean don’t get me wrong, I’m bearish overall, but considering there was a lockdown and still the majority of people don’t want to run around buying homes it’s realistically just junk data.

      Once things are completely open and most people are back to work then we’ll see what the actual numbers are, but until that time the data is pretty much worthless. Especially since it seems people are ignoring that inventory is not accumulating much at all versus sales, which is what BD preached as a great metric for the last years.

  • Grandv!ew 1 month ago

    Can someone clarify why is John Pasalis of “Realsophy” reporting different numbers, sales increases, price increases and market competitiveness with bully offers.

    https://twitter.com/JohnPasalis/status/1272519257851604992

    • Paul 1 month ago

      Biased research? Most sources say market is down but perhaps there are pockets that aren’t skewing the whole.

  • Jim Straughan 1 month ago

    I would not say these are junk numbers,however I agree the next few months data will be more significant or reliable as a longer term trend predictor.
    I have buyers waiting for prices to drop as there expert friends and family types are saying wait.Point being market confidence or psychology is a factor that is being shaped in real time based on these numbers.Some of these buyers may be shocked to find that when they want to buy the banks may not want to lend to them on the same terms as before .
    Not sure what positive data we are waiting on, record unemployment,high perhaps unmanageable government debt and personal debt.High if not record setting mortgage deferrals . World recession ?
    Perhaps worst of all a crisis of leadership in government and other sensitive strata such as academia and business etc. ?

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