Canadian real estate buyers spent a lot less cash last year. Canadian Real Estate Association (CREA) numbers show dollar volumes made a massive decline in 2018. The total amount spent on real estate resales made a massive drop, largely do to declines in Toronto and Vancouver.
Why Look At Dollar Volume?
Dollar volumes aren’t just important because Realtors get a percentage of it as their pay – they show liquidity. As dollar volumes rise, more buyer dollars are participating in the market, showing sellers have options. When the volume drops, it means less buyer’s are participating in the market.
By itself, participation doesn’t give us all that much – especially when detached from the number of units. However, it serves as confirmation or diversion of a trend. Rising prices on higher dollar volumes mean more buyers are accepting an up trend. What you’re seeing is more people accepting the market price, which means it’s healthy. When the dollar volume declines with prices, you’re seeing the market reject higher prices – making it more difficult for sellers. If prices move in the opposite direction, like higher on lower dollar volume – you have a diversion. This means fewer buyers are pushing prices higher, an indication that market exhaustion has occurred.
Canadian Real Estate Sales Drop By Over $38 Billion
The dollar volume of sales through the MLS dropped considerably last year. The value of sales fell to $224.04 billion in 2018, down 14.78% from the year before. 2017 was also considered slow for sales, but still ended the year up 0.14% from the year before. What we’re seeing is actually a new trend – declining dollar volume.
Canadian Real Estate Dollar Volume
The dollar volume of Canadian real estate sales, as reported through the MLS.
Source: CREA, Better Dwelling.
Every single month came in lower this year, but around March was the worst. March’s dollar volume fell to $20.61 billion, down 30.7% from the year before. That works out to $9.13 billion lower, just over 23% of the total decline.
Eastern Canadian Real Estate Leads In Growth
Only major markets east of Toronto experienced dollar volume growth, with the exception of Windsor. Gatineau sales came in at $1.17 billion in 2018, up 10.4% from the year before – the greatest highest increase. Montreal followed in growth with $17.65 billion in sales, up 9.4% from the year before. Halifax came in third with $1.65 billion in sales, up 8.2% from last year. Only three other markets with over a billion in sales in 2018 saw growth, the rest experienced declines.
Canadian Real Estate Dollar Volume By Market
The 2018 dollar volume of Canadian real estate sales in markets with over a billion in sales, as reported through the MLS.
Source: CREA, Better Dwelling.
Toronto and Vancouver Real Estate Lead The Drop
Toronto, Vancouver, and its suburbs led the market lower. Greater Vancouver reported $26.26 billion in 2018, down 30.4% from the year before. Fraser Valley, a board adjacent to Vancouver, followed with $11.09 billion in 2018 sales, a drop of 26.3% from the year before. Greater Toronto fell to $ 61.34 billion, a drop of 20.1% from the year before. Hamilton-Burlington, a suburb of Toronto, was in fourth at $6.6 billion in sales, a 19.1% decline form the year before. All four of these markets performed below the national average.
Dollar volumes dropped across the country, led by some of the largest markets. Now you can compare those to home price movements, to see how they compare.
Like this post? Like us on Facebook for the next one in your feed.