Canadian Real Estate Sales Make Largest Increase In 2 Years, Still Below Normal

Some Canadian real estate buyers are blowing off last year’s decline in sales. Canadian Real Estate Association (CREA) numbers show sales made a large increase in May. The rise, while substantial, failed to bring volume to historically significant levels. Last month’s sales still fall short of the average.

Canadian Real Estate Sales Jump, But Fall Short of A Typical May

Canadian real estate sales made a substantial climb from last year. CREA reported 54,599 sales in May, up 6.68% from last year. The increase, as large as it is, still puts it 9.89% below May 2017. The number of sales this year is 4.02% below the 5 year average for the month of May. There was a big increase, but it still falls short of a typical month for real estate sales in Canada.

Canadian Real Estate Sales

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

Source: CREA, Better Dwelling.

The rate of growth made an interesting move, possibly indicating a shift in sentiment. The 6.68% 12 month growth is the largest we’ve seen in two years. Don’t get excited yet, it’s also only the second positive number since 2017. There’s improvements, but there’s also a long way to go for things to get back to normal.

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 City, Toronto Lead In Annual Growth

Most of the increase in growth came from Quebec, Toronto, and the Prairies. Quebec City reported 864 sales in May, up 19.17% from last year. Toronto followed with 9,989 sales go through the MLS, up 18.89% from last year. Gatineau had the third largest growth with 648 sales, up 16.97% from last year. Toronto is the only city of the three to experience fewer sales this past May than in 2017.

Noteworthy is what’s happening in the Prairies. Saskatoon, Winnipeg, and Calgary held the next three spots for growth. Only the last of the three had fewer sales than in 2017.

Canadian Real Estate Sales By Market

Canadian real estate sales in markets with more than 400 sales in 2017.

Source: CREA, Better Dwelling.

British Columbia Real Estate Leads The Market Lower

British Columbian real estate is the big loser these days, followed by a Toronto suburb. Fraser Valley only reported 1,443 sales in May, down 14.36% from last year – the biggest drop in the country. Vancouver followed with 2,669 sales, down 7.65% from last year. Kitchener-Waterloo was in third with 655 sales, down 1.48% from last year. All three markets reported fewer sales for the month of May than they did in 2017 as well. Interesting takeaway here is the third largest decline wasn’t much of a decline at all.

Canadian Real Estate Sales Change By Market

The percent change in Canadian real estate sales, in markets with more than 500 sales in 2018.

Source: CREA, Better Dwelling.

Canadian real estate sales made a large increase, with most markets showing growth. This could be a sign that real estate sales have reached a bottom, and may move higher. However, since many markets have failed to move higher than 2017 numbers, it’s too early to tell. These volume movements are also seen in the “return to normal” stage of an asset bubble collapse.

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  • William Ma 5 years ago

    This is called normalization. It can go either way, depending on the economic environment.

    Considering our largest trade partner is seeing their economic indicators collapse while stock prices are moving higher, means the next “surprise” recession is going to be painful.

    • Peter Liberi 5 years ago

      Recessions don’t happen when people are prepared for them. Households need to assume the risk is passed before they let their guards down. Same issue in 2007, when they started to say the issue was contained.

      • Bluetheimpala 5 years ago

        Step 1) Create a prolonged chaotic environment that changes people’s psychology: “Housing/’the market’ is going up like crazy, I’m missing out”

        Step 2) Normalize psychology : “This isn’t a bubble, everything is fine. Uncle Tony has made a bundle and my wife and friends think I’m a pencil dick. See there was a slow down but that was just a blip! All the bears are morons. To infinity and beyond!”

        Step 3) Music stops with the smart money long gone : “I can’t offload my Vaughn cookie cutter mansion for $2M like my neighbour did 2 years ago? It’s only getting $1.2 and I have mortgage of $1.6 and a non-bank credit line of $100K I maxed out to furnish it.”


        • Jj 5 years ago

          Yup! That’s me! Bought 2M cookie cutter mansion in Vaughan 2yrs ago during 2017 hike. I honestly regret nothing and market seem to pick up 80% what it was in 2017 haha. With so much tight financing, i would never be able to afford this house in such low rate anyway.

        • Tom Wolfe 5 years ago

          what he said. it’s going to be a sh*tshow.

    • Chester Pape 5 years ago

      Unlike our AML-Act and PATRIOT act enforcers down below, financial agents, lawyers and even bureaucrats living in Toronto and Vancouver turn a blind eye on suspicious transactions.

      Suspicious transactions such as someone from a high-risk country struggling to carry a suitcase filled with Benjamins, or someone enrolling as a low income student at a university, yet owns a penthouse in the Financial District, and drives a 2021 model Ferrari on campus.

  • Marcus Uticensis 5 years ago

    They will devalue the currency until prices move higher. People don’t understand the difference between economic growth, and inflated growth not captured by CPI.

    • CanadaSucks 5 years ago

      Government lays out fine print of new CMHC program that could contribute 10% to price of first home.

      Program will be limited to first-time buyers who earn under $120K a year.”

      This program above is equivalent to printing money and giving to people for free. Yes, Canada is committed to destroy its currency through inflation. Lucky for Canada, Europe is also committed to destroy the Europe through inflation.

      Canada has no real economical polices. Canada economical polices are mass migration and inflating houses values. There is nothing else.

      • Chester Pape 5 years ago

        A “student” from overseas countries could park their money into a Toronto condo, declare $0 world income, and apply for Canadian benefits, yet even the racist Alt Right would turn a blind eye to this reality.

        • CanadaSucks 5 years ago

          You know what this whole money laundering thing make me think of. The collapse of the Soviet union. Just before the Soviet union collapse high ranking official and high ranking government employees were transferring money off shore.

          It is almost like some Chinese officials know that China is about to collapse Soviet union style and they are busy transferring money off shore and trying to make them-self rich from the collapse of China.

          It seems that Canada, UK, Australian and New Zealand are more than happy accepting this money. Who cares about the Canadians families. As long as money laudering is creating inflation and increasing housing values, everything is good and fines.

        • Bluetheimpala 5 years ago

          Did I stroke out or is this retarded? I’ve seen this subversion before, I called it the Gump. You introduce an idea that is backwards as a dog whistle to get people thinking/hating. I love the EY reference as I used to live there but that name is pure ALT right, love it…wink…shit that was NOT a dog whistle…fuck..ok back on track..Pumpkin, the ALT right spends too much time hating the jews and muslims, for example, who create value, culture, innovation and jobs. Try again. Tock. BD4L.

          • MM 5 years ago

            Am I the only person here that thinks Blueimpala is weird?

  • Chester Pape 5 years ago

    Money laundering and financial impropriety by financial consultants and lawyers. That what it is.

  • Leotie May 5 years ago

    I disagree that so called ‘NORMAL’ constitutes the last 3 years. These are basically the hottest years on record with 2017 being an absolute scorcher. The fact that 2019 is actually bouncing back from the relative low in 2018 after the insane peak in 2017 appears to be a positive sign. No idea which way things will go but I disagree with the interpretation/cherry picking of this data. Or please someone tell me what I missing here.

  • mmr 5 years ago

    I blame 15 percent tax for slow market. Please withdraw it. Let market decide. and remove un necessary stress test. Its slowing the market like Calgary for no reason.

    • Average Man 5 years ago

      Here’s one for you. Abolish the CMHC and REALLY let the market decide.

  • Adrian 5 years ago

    I’ve been following BD for over 3 years now and it reinforced my risk aversion when I was trying to decide if I should enter the market. I believed then, as I believe now that the market is highly over-valued compared to local incomes. Having said that, I would have been much better off suspending disbelief and taking the plunge. Every time the market goes up, people in the comments section tend to call it the ‘dead cat bounce’. I don’t think dead cats bounce quite so persistently. There is a lot wrong with the market, the biggest issue being money laundering. The fact though is that there is little appetite in Ontario to tackle that, hence anyone predicting an imminent market correction will probably be disappointed. I could afford a shoebox in the sky 3 years back, and I do regret not getting on in retrospect.

    • Kevin Lam 5 years ago

      Actually you would have saved $500k on a typical home in Vancouver, and $120k on a detached in Toronto.

      You could of course have bought a negative cap condo in Toronto, and paid more to service it than it’s worth.

      Financial news often isn’t very helpful if you don’t understand it. In the past 3 years you could have lost 10% in Canadian dollars on a house, or made 85% in USD equities while the Canadian dollar plummeted in value (along with your labor and assets).

      Real estate was a good investment from 2013 to to 2017, and 1987 to 1991. Any other period and you wouldn’t have made mii oh re than investing and renting, not accounting for your mortgage cost basis.

      • MM 5 years ago

        Only 4 months in 2017 had higher price for Toronto. Any price of 2016 (3 years ago) was lower.

        Even a monkey without any brain activity could randomly pick a time to buy a house in Toronto in last 3 years and it would get a lot of profit with probability 88%.

    • MM 5 years ago

      Adrian those were cool times, 3 years ago, eh?
      Bearish videobloggers appeared like crazy Mike Martins or funny Formafist.
      BD wasn’t the only bearish media…MontleyFool etc…

      Insane Wynne was here…Even John Tory was kinda trying to say “No to foreign buyer tax”, but after 30% YOY growth he threw hair on his chest out and surrendered to Unfair Housing Plan.

      Eh, nostalgic…

  • SUMSKILLZ 5 years ago

    None of the homes on my dog run have sold since April. None. Price reductions have not changed anything too. I don’t see the bounce everyone keeps talking about…not in north 905 at least. Its misery up here.

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