Canadian real estate markets have yet to see that expected boost from falling rates. Only a handful of markets have already reported September data, but RBC warns the trend continues to show new inventory outpacing sales. Rising inventory and sluggish sales are combining to fuel a downtrend.
Despite cheaper credit and lower prices, buyers still aren’t enticed to jump into the market. “Even with 75 basis points worth of interest rate cuts, we aren’t seeing buying activity pick up across the board just yet,” writes Rachel Battaglia, the author of the RBC report.
Adding, “Canada’s most expensive markets (Vancouver and Toronto) are still seeing modest fluctuations—keeping activity relatively stagnant since the spring. Easing supply-demand pressures are keeping prices in these markets on a downtrend too.”
Canadian Real Estate Sellers Outpace Buyers
Canada’s largest real estate markets have seen a significant uptick in sellers. Seasonally adjusted new listings significantly outpaced existing home sales in 4 out of the 6 major markets RBC tracks. Sales contracted while new listings continued growing in Vancouver, Fraser Valley, and Calgary. Toronto saw both grow from historically low levels, but new listings have outpaced sales in the region for the better part of the past year.
Only two exceptions to the trend were observed—Edmonton and Montreal. Both cities saw sales outpace new listings.
“The number of new listings increased across all major markets, except Montreal this September. The influx is continuing to build inventory—which is still hovering near the equivalent of four months of supply. Alongside weaker buying activity, the inventory accumu- lation is taking some of the steam out of most markets,” she explains.
Sellers Are Rising Much Faster Than Buyers, Boosting Inventory
Slower sales and rising inventory have been a national trend, with few exceptions. This allowed inventory to recover and build up much higher levels than the market saw during the peak of the low-rate frenzy. Annual growth of active listings was elevated in five out of the six major markets, with the largest jump in Calgary (+49.4%). It was followed by Fraser Valley (+37.1%), and Toronto (+35.5%), rounding out the top 3.
Edmonton (-11.6%) is the only exception, seeing a sharp decline in inventory. A big shift from a few months ago when the market was trailing the rest of the country’s big boom.
Battaglia notes, “[the] big boosts to inventory is keeping downward pressure on supply-demand conditions in most major cities.”
The bank sees demand picking up in the future, but it won’t be a straightforward process. Buyers are expected to jump into the market after a combination of lower prices and cheaper financing makes purchasing more attractive. Buyers have been resistant to jump into the market, pushing expectations of this year’s sales recovery into sometime next year.
NO ONE IS BUYING. WAIT FOR THE OVERINDEBTED TO BE FORCED TO SELL BY THE COURTS, THEIR BANKS OR THEIR MOMS. BUY NEW USA HOUSES WITH BACKYARDS FOR LESS THAN 400K.
DITCH EVERYTHING YOU OWN IN CANADA.
SEE YOUTUBE ZILLOW REDFIN ND LANDSEARCH FOR THE 142 MILLION PLUS USA HOMES AND FARMS.
Justin Trudeau will step in and save house prices. He is EXTREMELY intelligent and will do what is necessary to keep housing strong.
Well if he was intelligent he wouldn’t have allowed income to housing prices to get sso far out of whack. The fact that both he and his father used the same scheme to artificially increase housing prices, causing a debt and housing bubble means only that he knew what he was doing would result in a massive correction in housing prices some day.
The latest moves by Freeland, along with the ridiculous ‘supply’ narrative, are only adding to the tire fire they created.
It’s very simple housing prices are a function of median income. If the regulation is that no more than 33% off income should go to housing, heat and property taxes, how did prices in Toronto, Vancouver get so high?
Then there are the just ridiculous amount of speculators, Airbnb operators, private lenders, and so on? These people don’t even have income to pay their mortgages, they rely on rising rents to subsidize the market, which is where the real crisis is.
3this entire mess is basically the 2007 gfc all over again, except that Canada, Australia and a few us markets are in the epicentre. So if he is intelligent, which remains to be seen, then he is just a crook who understands exactly what he has done to 80% of us. So I think it’s better to just say he is dumb.
I will be voting Liberal simply to punish Trudeau. Why should another government inherit all this mess given they won’t be able to fix it ? Let Trudeau face the consequences of his actions and become the most hated man in Canada.
A increase in population has artificially boosted our market in the last 10 years. The immigration brought in new money from the immigrants. They were investing in a new place to live. This was the base for demand of a place to live.
But they have their limits as we do in money. The results of covid, high inflation, and income increase not happening is resulting, in no one having money. No money, no purchase, no economic growth
The increase in listing’s is show the weak economics now in our country.
The increase in the cost to live is felt for us all. Just go to buy groceries and see the whole in your pocket book.
Increase in population puts strain in all our services, and mostly in our job market. A flood of workers and they still are coming, increase in unemployment, and this effecting us all.
Someone should have looked at the effects off population growth if we do not have the jobs to support it. We are now feeling the beginning of the effect.
Well you are over simplifying it. Since 2014 there has been no increase in nominal gdp per capita. In fact real gdp per capita is down 35-40% since Trudeau came to town. This was mainly hidden by massive monetary expansion by private banks and the BoC. We saw the M3 money supply go from 1.65tr in 2014 to 3.9tr today. That means if you had 100 dollars in 2014, it was 237 in 2024.
Now a healthy money supply is designed to grow with gdp growth, to make sure that capital is not constrained by fixed money supply cap. In 1929, because the currencies were still a function of gold and silver, they didn’t have the option to just create double or triple the amount of money in circulation to increase gdp.
So since 2014, Canada’s gdp has gone from 1.95tr nominally to 2.1Tr. So in effect, while the money supply went up 23.6% per year, gdp went up 0.7% per year. Even worse, the creation of more than 2trillion for mortgages, govt debt, credit cards is all included in the gdp, so really the gdp has been below 2014 the entire time. Effectively the change in value of the dollar means that everything today is at least 40%% more expensive. So if we discount the 2.1Tr by 40% we have been in a long recession since 2014, with gdp at about 1.26tr or a a 35% drop in real gdp or 3.5% per year.
So this is the mess we are in. Importing people to do crappy jobs and become bank, teleco and grocery customers didn’t help, but it certainly is not the root cause, which is an abject failure by the feds to do their job, regulate banks.
The increase in listing’s will keep increasing as people down size or loose their homes, due to no jobs supporting the increase in cost of living overall. The jobs pay no longer supports our cost of living. This affects new and old Canadians.
The gta will end up having home prices down ward and out lieing areas were homes are less will see a increase or stable.
But we’re the jobs are will influence this.
I have already down sized right after covid. Loosing high paying job, now self employed, and trying to survive. 3 years before
retirement and still need to work. Last year was a good year but this year down to 20 % of income. This is not a good sign. But investment in real estate is still holding firm.
Claude, you are right. Prices in the gta must come down, or wages must more than double in the next couple of years to make prices ok. The other problem is that in real terms, we are all making 35-40% less than we did in 2015. So not only has housing doubled or more in cost, along with everything else, we also have far far less to pay for it all.
Next is unemployment will hit 10-15%, and the economy in places like the gta, that are completely dependant on interest sensitive sectors will collapse. Trudeau and Freeland are trying to make this a problem for the next govt, and somehow both can still say they are ‘delivering’ for Canadians? The problem is unless you are a bank investor, developer or realtor, it’s hard to see how. This period represents the worst economic performance by a govt since the Great Depression. So not only are they a terrible govt, they are unethical too.
The big problem now is whoever replaces Trudeau has inherited a hand grenade. There is no path back to gdp growth in the next 5-10 years. Even if all of Trudeau’s dim witted programs are cancelled, a new govt green lights every oil sands and pipeline project they can find, we are going to continue to suffer. It’s basically a carbon repeat of his father. Drove Canada’s economy into a wall to help his buddies like the Irving’s, Weston’s and bronfmans, then disappeared after the collapse became apparent. Frankly the liberal party should be dismantled and the cabinet made personally responsible for the mess they have caused.
Why should any other party inherit the hand grenade? Let Trudeau keep it.
As you have pointed out correctly, this is not a mess that can be fixed in the next 5-10 years. Conservatives will be wise to sit out that period and let the liberal party destroy itself once and for all.
The phoenix can then rise from the ashes.
BS. Why sit on the sidelines? This is not financial advise. Calculate what you can afford, including property taxes, insurance, and maintenance, add a budget contingency, and go make lots of contingency offers.
If you can afford a 10 % to 50 % fall in prices, your all set, Jump right in and keep the real estate people happy.