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Canadian Real Estate Dollar Volumes Are Dropping, Especially In Toronto

Canadian Real Estate Dollar Volumes Are Dropping, Especially In Toronto

Canadian real estate dollar volumes are dropping. Numbers from the Canadian Real Estate Association (CREA) show that less sales, and stalling price growth are putting a drag on dollar volumes across the country. This decline was led by the country’s largest markets – Toronto and Vancouver.

Why Dollar Volumes?

Dollar volumes help determine market liquidity, when combined with other factors. Growing dollar volumes show more money,  which is a positive for liquidity. Declining dollar volumes mean less money, and generally a decline in market liquidity. Once again, you can’t determine that using just this metric. You would ideally combine it with sales, and inventory to get a better read.

Example: Higher dollar volumes, less sales, and less inventory generally means price growth. Investors buy into price growth typically. Decreasing dollar volume, less sales, and more inventory means lower prices. Investors typically sell into price declines. You can mix and match this indicator in a lot of ways, but it’s generally one of the most important factors. Today, we’re just going to discuss raw dollar volume changes. This is a starting point for your market research, not your conclusion.

Canadian Real Estate Dollar Volumes Down 8.5% In September

Real estate dollar volumes are down across the country. September saw $19.03 billion in sales according to CREA, down 8.5% compared to the same time last year. That brings the total dollar volume across the country to $208.5 billion year to date. This is a decline of 1.5%, when compared to the same period last year. The drop across the country was largely due to declines in Toronto, the country’s largest market.

Source: CREA.

Toronto Real Estate Dollar Volume Down 33.9% In September

The Greater Toronto market dropped by both measures. September saw $4.94 billion in sales, down 33.9% compared to the same month last year. This brings the dollar volume to $61.95 billion year to date, down 4.7% compared to last year. Not a significant decline on the year to date, but most of that dollar volume was concentrated in the first half of the year.

Vancouver Real Estate Dollar Volume Up 46.6% In September

Greater Vancouver saw dollar volumes soar in September, but that’s only part of the story. September saw $2.91 billion in sales, a whopping 46.6% increase compared to the same month last year. That only brings the total sales to $29.37 billion year to date, down 18.1% compared to the same period last year. Last September was the second month after the implementation of a non-resident tax. This likely kept last September’s numbers artificially low.

Montreal Real Estate Dollar Volume Up 7.6% In September

The sleepy market of Greater Montreal has been getting a lot of attention recently. September saw $1.08 billion in sales, up 7.6% compared to the same month last year. The total is now $12.21 billion year to date, up 12.8% compared to the same time last year. The growth is large, and showing of a healthy market. To put it in context however, Montreal is a city larger than Vancouver, with a third of the dollar volume.

Source: CREA.

September’s Biggest Dollar Volume Winners

The largest jumps for the month of September were mostly observed in Lower Mainland, BC. Fraser Valley saw $1.09 billion in September, a 47.9% increase compared to last year. Greater Vancouver’s $2.91 billion, is up 46.6% compared to last year. Saint John, New Brunswick is in third at $33.9 million. Yes, that’s the equivalent of just 20 Vancouver detached homes, but it’s 18.1% more than September 2016.

September’s Biggest Dollar Volume Losers

The biggest losers in September were mostly located in the Greater Golden Horseshoe. Greater Toronto’s 33.9% decline to $4.97 billion, leads the declines by percentage. The Niagara region, just an hour away from Toronto, saw $188.5 million in sales, a 30.4% decline compared to last year.

Once again, dollar volumes are your starting point for research. Irregular movements, or large swings should be a flag for investors to start pulling other metrics, to help with analysis. If you’re tracking any markets in particular, let us know what you’re seeing in the comments below.

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7 Comments

  • Reply
    Trader Jim 4 weeks ago

    Toronto YTD:

    – listings: +13.1%.
    – sales: -18.1%
    – dollar volume: -4.7%

    Have fun!

    • Reply
      Dana 4 weeks ago

      Hahaha. In terms of having fun in Toronto, let’s wait for the disco ball arriving in January aka new mortgage rules. Along with the massive inventory of the new condo pre-builds coming this year. 😜😜😜😜😜😜😜😜

  • Reply
    David S. 4 weeks ago

    Vancouver’s jump in September is greatly overstated. The average sale prices is now in negative territory, the first time in a very long time. I believe you’re right that the foreign buyer tax numbers make it difficult to understand what it means.

    • Reply
      robocop 4 weeks ago

      The Van. average going down likely has all to do with the fact that higher priced single family homes aren’t moving at a clip anywhere near they were in 2015/2016 – in 2017 SF sales down 29% YOY and dollar volumes down 31% for SF (down $6.9B from YTD Sep ’16 for SF homes). If there wasn’t such a strange rush into condo’s over 2017 (down in terms of units sales 7%, but up randomly in terms of volumes almost $1B YOY YTD Sept), then the numbers in this article would be a horror show. The condo rush in 2017 has really masked the quagmire in the SF space. Our local real estate board has really jumped on the condo story in terms of setting the narrative for our unfortunately super lazy local reporters who like to copy and paste. .

  • Reply
    bluetheimpala 3 weeks ago

    In the list of cities where are Mississauga, Brampton, Oakville, Orangeville, Pickering, Ajax,Oshawa? Mississauga is one of the top 5 largest cities in Canada but Kitchen-Waterloo is included?

    I love this site but not representing major markets like the ones listed seems crazy!

    • Reply
      Michael Z. 3 weeks ago

      “Mississauga, Brampton, Oakville, Orangeville, Pickering, Ajax,Oshawa” are all grouped as Toronto, since it’s covered by TREB. So there’s City of Toronto, and Toronto (which is TREB, which includes all of those burbs you listed).

      These outer cities would have a slight influence in the number, but not a huge one due to the fact that the sales numbers are much smaller than the City of Toronto itself. A weighted average is used to normalize those numbers. Hope that was helpful!

  • Reply
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