Canadian real estate sales continue its slide lower. Canada Real Estate Association (CREA) numbers show sales fell across the country in October. The trend of higher sales in Ontario and East continued, with mixed results in the GTA. BC’s continued declines were the most significant drag on the numbers this month.
Canadian Real Estate Sales Fall Over 3%
Canadian real estate sales came in lower last month. CREA reported 39,313 unadjusted sales in October, down 3.39% from last year. The number is fairly normal, falling just 17 homes under the 10 year average. The slide is the second consecutive time we’ve seen October fall since hitting a sales peak in 2016.
Canadian Real Estate Sales
The unadjusted sales for all home types, as reported through the Canadian MLS.
Source: CREA, Better Dwelling.
Declines are generally bad, but this one isn’t too far off base. It’s the lowest October since 2013, but it’s larger than half of Octobers over the past 10 years. September was unusually weak however, we saw the fewest September sales since 2007. There’s a good chance many of those September sales were pushed into October.
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.
Quebec Real Estate Is The Fastest Growing In Canada
The fastest growing large urban real estate markets were Quebec City, London, and Montreal. Quebec City saw 567 sales in October, an increase of 13.4% when compared to the same month last year. London saw 904 sales, up 12.3% from last year. Montreal came in third with 3,731 sales, up 11.3% from last year. Quebec City and Montreal didn’t see a boom with the rest of Canada over the past few years, so they’re playing catch up.
Canadian Real Estate Sales By Market
Canadian real estate sales in markets with more than 500 sales.
Source: CREA, Better Dwelling.
British Columbia Real Estate Sales Lead The Market Lower
The fastest declines were observed in Vancouver, Hamilton, and Victoria. Vancouver had the biggest declines with 1,995 sales in October, down 35.1% from last year. Hamilton was a distant second with 1,035 sales, down 13.1% from last year. Victoria reported just 556 sales, down 12.4% from last year. Two of the largest declines in BC aren’t a huge surprise, considering the general market slump. All but one of the province’s boards (Northern BC) reported a decline in sales compared to last year.
Canadian Real Estate Sales Change By Market
The percent change in Canadian real estate sales, in markets with more than 500 sales.
Source: CREA, Better Dwelling.
The general market is starting to stabilize compared to last year. Sales declines are getting smaller across the country, which is encouraging. However, when we’re seeing numbers fall from such a high point, the possibility of a dead cat bounce shouldn’t be ruled out.
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Here’s the thing. The average person sucks. They’ll over estimate the value, and underestimate the risk almost every time. Sales almost always taper as rates move higher, it’s just basic math. Don’t tell that to the couple that’s in a rush to have a kid though.
Reminiscent of the old adage, “invest like average people if you want average returns.”
If real estate was the best way to make money all of the time, than almost 70% of the country would be rich.
Agree. There is no upside left in the market, with plenty of downside risk due to leverage, rate hikes,
and slowing US and Chinese economies.
Better to wait and see how rising interest rates impact the market before jumping in at this point.
Except that rates did not go up that much. The lowest 5 year rate was 2 years ago at around 2.5%. Now it sits at 3.3%. And longer term bond yields are not going up even if Feds raise 1-2 more times. Even the stress test only has minimal impact, mostly psychological. The 20% foreign buyers tax in Vancouver is what’s doing most of the damage at the higher end, but does nothing for affordability.
Why you even posting that nonsense?
The whole Vancouver market is correcting including condo sector.
https://vancitycondoguide.com/wp-content/uploads/2018/11/Saretsky-Report-October-2018-1.pdf
Canadian real estate sales are bad, but at least we’re not Vancouver. THAT’s going to hurt!
we usually follow suit
To be fair one usually follows the other. Vancouver->Toronto or Toronto->Vancouver
agreed
Agreed, a lot of people aren’t following the right bouncing ball. Ontario is an economic beast, we are Canada. Bc is a joke and if it isn’t killing investment it is squabbling with AB. Qc needs handouts to exist. Oil has pooched the west and we sell for a fraction of wti so we’re losing out on billions. Potash is so 5 years ago and SK is still a waste land. The Atlantic region is the same as it’s always been slow moving and slow thinking. Sorry to break it to you all but when the dust settles the GTA will be the only area emerging from the ashes. Tick toll. BD4L.
+1
This ∆.
As a Fraser Valley b.c resident, this couldn’t be more true. At least the party about B.C. the rest made me laugh, probably because they are true as well.
Blue before buying a house in TO: the price in all markets is on the verge of collapse, it’s only a matter of time. It can’t go up, it will stay flat, it must drop eventually.
Blue after buying: the price in all markets EXCEPT TORONTO is on the verge of collapse, but in Toronto you better get in now before you miss out!
Just a friendly reminder that EVERY commenter here has one goal only: choose the narrative most beneficial to them, and state it as reality over and over until hopefully enough people believe it and it becomes reality. No different from bitcoin investors flooding forums and pretending it’s a foregone conclusion the price will soar/tank, based on whatever suits them at the moment.
Removing rent control on new units won’t ease Toronto’s housing crisis, tenant and housing experts say
https://www.thestar.com/news/gta/2018/11/15/removing-rent-control-on-new-units-wont-ease-torontos-housing-crisis-tenant-and-housing-experts-say.html
Happy renting!
Tick Tock. BD4L
I am with 95K + job and I am trying to switch to a better job or contracting. But it fails at salary negotiation stage. There are tons of immigrants coming from various places. Recently one of my friend’s friend had to settle for 65K . And some others around 70 to 75K. The problem is they are getting jobs, but salaries are getting more and more saturated. And the rent is over the roof. Mind you, not much immigrants bring money for downpayment. A single bedroom apartment in remote part of the toronto costs 1700+. That is almost 50% of their income. I dont know where this will end. What do you think? Unless someone with big capital (out of non local income) invests, I doubt this will go forever.
My friend who bought 1.3 M house in brampton in share with 3 friends, paying a mortgage of 4500, but rental income is 2500. So he pays 700$+ out of his pocket every month to cover mortgage expense.
The prices are also bit stubborn in coming down. I think as long as the economy is doing good everyone is going to hold the house. Unless immigration is controlled, and income somehow doubles or atleast 1.5 the average, there is no light for this mortgage/rental slavery.
You can always tell the middle class homeowner with all of their wealth in their home.
People with real wealth know they always rent, they won’t always own. When cap rates are this low against rising rates, caps will improve but the value of the asset falls. That’s how basic real estate investing works. Do the basics instead of the “people that don’t have enough money to diversify so they’re handing out terrible advice to validate their choices” investing.
Happy retirement! Don’t let the HELOCs bite.
Tick Tock. BD4L
Great idea for a Christmas present, ornate signs that read: “Good Night, Don’t Let The HELOCs Bite!” I have a few relatives that can use such a sign in their extravagant “man-cave” or “she-shed”.
Tightening credit has already reduced prices. Psychology is shifting by the day. As inventory continues to rise prices will continue to contract. You millennials need everything now or will never happen;that is a pretty scary mindset. Tick tock indeed. BD4L.
Let’s not politicize the generic age groups Blue. MillenMillenials aren’t the ‘need it now or not at all’ generation.
In reality it is a two-fold development.
1) Its capitalism. If ‘A’ can produce the same results as ‘B’ but in half the time, you select ‘A’ every time. It’s just simply better value. Yes there can sometimes be a cost… but still, better value.
2) This actually began just after world war 2. In north america we developed processes foods such as cereals and thebTV din er which allowed for the instant food and opposed to actual cooking. It was so successful we now have grocery stores packed with processed foods instead of whole foods.
Millenials didn’t develop this. We were born into it. And computers have just made other things faster too.
Broad strokes for simple folks, I barely read at a grade 3 level. Yes John, I understand people are different but have you spoken to a millennial about their stock buying specifically fundamentals and buying th dip? About how they view cost of borrowing? Long term debt or sustainable/normalized interest rates? Novelty and urgency in consumer purchases? They are sucking money out of the boomers and wasting it in generalalities of course due to their lack of self control and naivety. Sure I may shit on them but here’s the real run: I am one. Tick tick BD4L.
Any stats to back up your words Blue?
I don’t have stats on hand except for this one which is not in boomers’ favor:
https://www.theglobeandmail.com/investing/personal-finance/article-seniors-the-first-to-crack-as-rising-rates-crank-up-debt-stress/
Tick tock indeed, indeed. As we know when the 80s bubble “burst”, there was an initial hit, but the correction took 3 or 4 years before bottoming out.
Even more so this time around, due to historically low interest rates, and nearly full employment, prices will likely deflate by less than 1% per month on average.
In this light speed intertubes world, in relative terms, it’s probably going to look like an agonizing so slow you can barely see the clock hands moving scenario.
tick……………………………………………………………………………………………………………………………tock
Unfortunately this is the sad reality. The employment is high. But not high paying salaries. Not enough to buy with minimal mortgage payment. Rents are high. People are holding on to it. A kind of deadlock situation. In the end people are the losers. Either they pay lot of rent or lot of mortgage.
Yes your right…What the bright side is for those not in yet is they are not the ones holding the bag…or hot potato…thats what this is right now..those who were able to get into the market sadly 1 to 2 years ago are stuck with their purchase for a long time to come only to pay pay pay the interest on an investment deep underwater or walk away. but a least a renter can do this especially if a better more affordable unit comes along…it will one day be a renters market not only a buyers market when reality kicks in and landlords have to compete for good tenants.
Canada instituting 40 year mortgages with zero down during the recession helped stop the market from falling. Interest rates were kept low for too long and there is way too much foreign influence in the major cities. Everybody argues that prices with crash or they will keep going up.
This is impossible to predict as we have seen the government is the puppet master in all of this. Prices fell in the GTA because 16 changes were muscled through at once by the provincial government while the qualifying rules changed and then interest rates went up. That is like Blitzkreig on the housing market. There was a kick in the shins as people freaked out at first. Now the housing market looks normalized. The incremental interest rate increases (which they should have started doing 7 or 8 years ago, even at .25% per year) will probably hold it in place but a sudden jump would definitely startle everyone.
So now we have rent controls, changes to downpayment amounts and qualifying rates, foreign investor taxes, rising interest rates etc. That is a lot of pieces to play around with.
If the Government decides they want to crash the housing marketing it will be simple. If they decide to try and keep it expensive OR cause another bull rush they have the tools to do so as well.
The one thing that insulates Toronto is that it is the only real big city in Canada. I live in Toronto, my wife and I work in Tech. She can move to the US as software designer, but I can’t nearly as easy working in sales. Vancouver is horrible, Calgary doesn’t have the opportunities, Montreal is challenging as we speak no French, and places like Halifax are too remote, low paying, and again very few opportunities. So I am pretty much stuck in Toronto paying whatever the market tells me to pay. That said, we would probably have a higher standard of living on one income in a lot of US cities than we do double income here.