Canada

Canadian Real Estate Sales See Slowest April Since 2009, Toronto Leads Declines

Canadian Real Estate Sales See Slowest April Since 2009, Toronto Leads Declines

Canadian real estate sales continue to cool after a record buying spree. Canadian Real Estate Association (CREA) numbers show sales continued to drop in April. A few markets east of Toronto saw a mild boost in sales. However, the majority of Canada’s urban centers continued to see declining numbers.

Canadian Real Estate Sales

Seasonally adjusted monthly residential real estate sales.

Source: CREA, Better Dwelling.

Canadian Real Estate Sales See Largest Annual Decline Since 2010

Canadian real estate sales have declined to the lowest level in years. CREA reported 36,297 sales when seasonally adjusted, down 2.9% from the month before. Compared to the same month last year, this is a 19.73% decline. This is the worst April since 2009, and the annual decline is the largest since 2010. Most markets saw declines compared to last year.

Canadian Real Estate Sales

Twelve month percent change of sales.

Source: CREA, Better Dwelling.

Greater Toronto Real Estate Leads The Declines

Last year’s fastest growing markets, are this year’s largest declines. Greater Toronto was the biggest loser with 7,792 sales in April, a 33% decline compared to last year. Hamilton-Burlington came in second with 1,129 sales, a 28.8% drop from last year. Kitchener-Waterloo came in third with 592 sales, a 27.4% decline. Vancouver came in fourth with 2,631 sales, a 27.3% decline from last year.

Canadian Real Estate Sales, By City

Composite sales, in Canadian cities with more than 500 sales in April 2018.

Source: CREA, Better Dwelling.

Quebec City, Halifax Real Estate Markets Lead The Gains

National sales might be dropping, but not all markets are seeing sales decline. The biggest gain was in Quebec City with 811 sales in April, a 25.2% increase from last year. Halifax came in second with 569 sales, a 13.1% increase. Ottawa came in third with 2,041 sales, a 9.8% increase from last year. Montreal came in third at 5,432 sales, a 9.6% increase from last year.

Canadian Real Estate Sales, Percent Change By City

Percent change of composite sales, in Canadian cities with more than 500 sales in April 2018.

Source: CREA, Better Dwelling.

East of Toronto we’re seeing sales numbers rise, in markets that missed last year’s rally. Toronto through to Vancouver? Not so much.

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51 Comments

  • Reply
    Mikey 1 week ago

    Biggest takeaways should be how long it takes to build confidence back to that level. The sale chart clearly shows sales drop quickly, but take years to build back up. Winter is coming.

    • Reply
      Trader Jim 1 week ago

      March 2018 is the new Sept 2008 on that chart. Minor bump higher, before the rug gets pulled out from under them. Vancouver’s numbers aren’t looking pretty these days either.

      • Reply
        John 1 week ago

        When sellers have no leverage in the negotiation, why do we care if they’re scared or not?

        Its buyer mentality that matters right now, and the numbers say buyers aren’t interested.

      • Reply
        Alistair McLaughlin 1 week ago

        Apparently someone forgot to tell these sellers not to panic.

        https://www.macleans.ca/economy/realestateeconomy/toronto-real-estate-losses/

        Or these:

        http://www.communityforfairness.ca

        The fact that most sellers aren’t panicking shows how steadfast they are in their belief that real estate always goes up. And why not? They’ve had 20 years of being right about that. It will take a little while for the mindset to change.

        • Reply
          Bluetheimpla 1 week ago

          Yuuuuupppppp….there are two types of sellers in this market. Those who wanted to cash out but DON’T need to sell. This cohort will no doubt wait but some, as the prices come down, will pull the trigger late stage as they see their equity erroded (everyone is a paper millionaire now!). Others will hold on until they need to move (if they do it in the next 5-10 years, they will sell in a down market). Then there are the ones that MUST sell and will just have to suck it up that a 3br/3bth 90s hell hole is not worth $1M just because it is in the ‘best part of Milton/Brampton/Mississauaga/etc’. Despite these two mindsets the reality is prices are coming down. Water is wet. Sky is blue. Sure you can hold on. It doesn’t change reality. BD4L.

          • John 1 week ago

            I disagree. The sky is not blue. It is just our perspective of the refraction on sunlight passing through our atmosphere.

      • Reply
        MH 1 week ago

        “Sellers aren’t panicking” and just to make it perfectly clear they are announcing about it in the newspapers? I see… That’s what anyone totally not in the state of panic would naturally do.

        Just keep paying those multiple mortgages, loans, credit cards, property taxes and upkeep fees. Most importantly keep totally not panicking. Do you hear me? KEEP NOT PANICKING.

      • Reply
        Alistair McLaughlin 1 week ago

        The reason they are staying put could also be because many would-be sellers know they could not qualify under the new OSFI rules. So they can’t list and buy another home. They’re stuck where they are.

        That’s not the way they’re spinning it of course:

        Homeowners in Toronto and surrounding regions don’t seem too impressed with what’s been going on in their housing market, and they’ve responded to the slowdown by staying put in their homes.

        That decrease in supply could actually help the market bounce back faster than it would have otherwise.

        https://www.huffingtonpost.ca/2018/05/17/toronto-new-home-listings_a_23436420/?utm_hp_ref=ca-homepage

        Funny how the Huffpost prints the same theme a day after the Star. Expect the same theme to appear in all the major media outlets by Friday. Total coincidence of course. It is absolutely NOT a sign of a concerted effort by the real estate industry to manage market psychology. Who would ever believe such a thing?

  • Reply
    Sammy 1 week ago

    Total sales numbers aren’t that important. The reason for the decline in Toronto has to do with the big climb it made last year. Now we’re back to normal, not a big deal.

    • Reply
      Mark 1 week ago

      If you looked at the graph you’d notice that we’re currently still dropping in a downtrend, and there is nothing normal about that. You would have to see a bottom out or a sustained uptick in order to call it back to normal. Just because it hits the normal sales number turning an absolute implosion of sales numbers (again look at the graph) it doesn’t mean things have normalized, they’re still falling monthly.

      • Reply
        Bluetheimpla 1 week ago

        Ding ding ding…can’t ‘recover’ until we hit bottom and we’re months (and a recession) away from that happening…see where we are this time next year. Pray for mojo. BD4L.

        • Reply
          Grizzly Gus 1 week ago

          Until the bad debts are cleared, and the masses look back and admit “what the hell were we thinking paying 500k for 450sqft of constuction materials” no true recovery can happen.

          I would say 3-4 years away from that unfortunately, maybe longer.

    • Reply
      Bluetheimpla 1 week ago

      Definitely, we’re back to normal but RE is so 2018, Sammy, I have some tulip bulbs. They were going for $500 last year but now are a steal at $200…$200 for a tulip bulb makes sense right? I mean they were going for 2.5x that last year so this must be the bottom. Oh Sammy, I fear for you my boy…either you are a troll, pig/possum or naive. Please stay away from strip clubs and nigerian princes who contact you via email; I get the impression it is quite easy to separate you from your money, BD4L.

    • Reply
      Asterix1 1 week ago

      No analysis, wrong info and a false conclusion on what’s happening!

      Which RE agency do you work for?

  • Reply
    Ian 1 week ago

    If sales are falling in Vancouver, why is there no price decline?

    • Reply
      Mark 1 week ago

      Price declines follow sales volume declines in all types of markets, it’s like a whiplash effect. First the volume dries up to where it tightens, and that’s when the bottom falls out.

    • Reply
      Bluetheimpla 1 week ago

      Due to the grey money in Van it seems to be 3 months behind Toronto. We’ve been seeing volume declines for month and now the active listings are bonkers leading to excess supply and as we all know from econ 101, excess supply when sustained will depress prices. Plus we now have a drop in demand…for the bears this is a ‘middle out’ moment…BD4L

    • Reply
      MM 1 week ago

      I’ve been watching the Fraser Valley rather closely. There are definitely price declines happening. Just 10K to 50K here and there, but prices are no longer increasing. Not even for townhouses. I don’t think we’ll hear about it in the news for another month or two though. Seems to be what happens. One time BNN was going on and on about how Vancouver was correcting due to foreign buyer tax when in reality out in the Valley townhouses and condos were going nuts with multi offers like 50K over asking. Prices went up 100K for townhouses that Spring/Summer. There was no correction for attached that is for sure!!! So all that to say I’ve noticed that the media isn’t always up to date on what’s happening on the ground.

  • Reply
    RMS 1 week ago

    Vancouver and Toronto’s Real Estate Cycle is on the decline. Makes sense that people set their sights on Montreal. Or maybe it was because of the New AI Tech Sites in Montreal by Amazon and Google.

  • Reply
    CondoBillyBob 1 week ago

    Pfft.. April was the last hot month last year so of course this year looks terrible in comparison. Wait until May-August numbers show up – they’ll show YoY gains and a gradual turnaroudn – bookmark this comment and feel free to use it against me if you don’t think that’ll happen..

    • Reply
      Mark 1 week ago

      Sorry Billy, but that’s a completely wrong statement. If you’d like to inform yourself with the actual data you can see that the released April total sales numbers are worse than any of the last 10 years, and possibly even further back:

      https://toronto.listing.ca/real-estate-price-history.htm

      Last month the bulls were saying “oh just watch what happens in April”… now it’s May… then it’ll be June… etc

      • Reply
        CondoBillyBob 1 week ago

        I’m not a bear or a bull – I’m a realist. Things overshot hot, now they’re overshooting cold. Reversion to mean is a force we can’t fight..

        • Reply
          Joe 1 week ago

          We are still way above the mean, and will not revert below it until 2020. This thing has to fall a lot more…

        • Reply
          Mark 1 week ago

          We are well above the mean Billy, and the graphics/stats show that we haven’t even begun to swing cold.

        • Reply
          Tommy 1 week ago

          We’re still 20% – 40% above the mean haha.

        • Reply
          vnm 1 week ago

          Is that short for realistateagent?
          Guess again. Prices are now 40 – 45% above trend and with the usual overshoot will
          bottom out well below that.

        • Reply
          Bluetheimpla 1 week ago

          I assume you’re under 30 and hopped up on red bull, goof balls and Fortnight…we’ve got a long way to go my boy.BD4L.

      • Reply
        John 1 week ago

        I like the Zolo market stats too.

        The 28 day moving average is starting to show another May divergence for sales:new listings
        https://www.zolo.ca/toronto-real-estate/trends

    • Reply
      Mark 1 week ago

      You can also note that you were wrong twice, as May was technically the last hot month for sales, with investors dumping at the peak.

      • Reply
        CondoBillyBob 1 week ago

        Mark – good point – May might still turn out looking negative as a result.. June it is!

        • Reply
          Mark 1 week ago

          If we don’t see YoY gains in sales numbers between June and August than the market is 10 times worse than even the biggest RE bear is predicting. So that will definitely be the case. Although mind you as you’ve mentioned previously, YoY comparisons to 2017 are pretty much worthless, the real thing to watch will be June to August sales in comparison to 2008-2016 to see where things are really at.

          • Bluetheimpla 1 week ago

            Psychology is shifting. It takes years to reverse.

    • Reply
      Grizzly Gus 1 week ago

      We will have MoM declines from June – August (normal seasonality) but we could have YoY gains by July/August. Still a lot of denial out there. Could even get a small bull trap in the fall depending where rates are at. Pre approvals from July 2018 with get you to November/December. Will also depend on how many more stories come out about financial ruin. That being said, economic gravity is starting to take hold, next spring at the latest we will be in full blown panic mode. Time to meet your maker Billy.

      If May is down MoM from April however……….. look out below.

      • Reply
        CondoBillyBob 1 week ago

        Sounds reasonable, Grizzly. As Mark pointed out above, May had some strong momentum still (leftovers from April) in 2017 before the SHTF a week or two in. It means YoY May data might still look negative (or not). June might be a more reliable indicator, where I would definitely not be surprised to see YoY gains in both price and sales.

      • Reply
        CondoBillyBob 1 week ago

        Oh wait you were talking MoM April to May. That should be interesting 🙂

  • Reply
    vnm 1 week ago

    What’s remarkably grim is how sales are tanking in the spring market,with interest rates still close to record lows, and the the U.S. and Canadian in what is being described by govt, bankers, and their economist shills as being in an ideal “Goldilocks” moment.
    In fact it’s looking increasingly looking like a millennial Hansel and Gretal story, where the greedy RE witches end up being cooked alive in their tastelessly over-renovated Gingerbread house ovens … a morality tale for the ages with a wonderful happy ending.

    • Reply
      Tommy 1 week ago

      Once condo speculators start seeing a decline in condo prices, and their gains depreciating, a sell-off similar to 1989 will occur. Overnight we’ll have a glut of unlocked supply in a market that is short on supply.

      • Reply
        vnm 1 week ago

        “… unlocked supply …” well put, that’s a good term for it
        Even if you are willfully blind to the demographic and bricks and mortar data, you’d think it would occur to the industry that they are suggesting the physically impossible –going from a housing shortage to a surplus virtually overnight, which inevitably occurs in a market correction.
        Homes do not suddenly pop out of the ether, and there aren’t enough moving trucks for a population exodus of that magnitude.

  • Reply
    NJ 1 week ago

    there’s some smoke with TREB and OREA…does CREA has any power to do anything?

  • Reply
    Laura 1 week ago

    Can someone please explain to me why/how a decrease in actual sales means a price decline will follow? Couldn’t someone argue that less sales means there’s more buyers trying to buy the same properly? Less listings?

    • Reply
      Alistair McLaughlin 1 week ago

      Listings aren’t down in the GTA. They are way up over last year. More listings yet fewer sales can only mean one thing – fewer buyers. More supply and less demand can only mean one thing – lower prices.

    • Reply
      Alistair McLaughlin 1 week ago

      I should add that new listings are down, but since sales have plummeted even more, active listings are growing. New listings have plummeted because many would-be sellers know they would not qualify under new OSFI rules. As long as they stay put with the same home and same lender, they don’t need to requalify.

  • Reply
    CJ Ray 1 week ago

    The RE inventory in the GTA is growing on a daily basis and quite quickly in resale detached homes. The fundamentals have long been breached so affordability is pretty much non-existent. Couple that with increasing mortgage rates, the stress test and tons of negative media information of the current market, then you have a scenario where ‘up’ is no longer possible. There may be a few naive (or plain dumb) buyers left that aren’t paying attention to what’s going on, but that group is dissipating.
    Now we can step back, look at the listings on the market and what you get for your money…….and then toss your cookies! Because, what little you get for the money right now is absolutely sad! Those that made money over the last 5 years should count their blessing because it was the stupidity of the masses that created this bubble (or hot air balloon). We’ve see the worst in people due to the greed, and shyster business practices from the new bottom feeders. I won’t start on speculators.
    Btw – Lawyers are your friend.

  • Reply
    AJ 1 week ago

    People don’t understand that liquidity in the credit market drives prices. We are in the tightening phase of the credit cycle with rising interest rates and OSFI rules. We haven’t hit the point where lot of sellers have to sell. But it will come very soon, once interest rates/ bond yields hit a tipping point that the economy starts slowing down and unemployment starts inching up. Remember, even if 5-10% of the homes face foreclosure, it will affect the prices of the entire neighbourhood

  • Reply
    showerthoughts 1 week ago

    The government has long decided to protect homeowners, developers, and speculators at all costs. They refuse to raise interest rates more quickly for that reason. Meanwhile first time home buyers and low income buyers have become the have nots in our major metropolitan areas. They find themselves justifying having to rent or move hours away from where it was affordable 5-10 years ago. It’s strange that they can’t come together and start a movement, demanding an end to the interest rate cartel that’s taken away the opportunity to buy a suitable property. If things don’t change, it’ll be too late for us.

    • Reply
      AJ 1 week ago

      Exactly. This is what my fear is. The market determines bond yields which determine the fixed rate mortgages. But the BOC manages the prime rate which determines the variable rate. Currently the banks are at war with each other as to who will give the lowest variable rate. BOC will never raise the rate this year because there will be conflicting signals (unemployment vs inflation) that will cause them to postpone the increases. Till then the current homeowners will just switch to variable rates when they renew.

      Only hope is that the US Fed raises rates quick /high enough to put pressure on the loonie that the BOC is forced to raise no matter what. Now that oil price is expected to increase, even that won’t help since the loonie will appreciate as oil prices go up. Only a recession will tip the scales firmly in favour of the buyers (whom ever still has a job!!!)

    • Reply
      vnm 1 week ago

      Just so. A big problem is that the BofC has to prioritize Canada as a whole, while the housing crisis is centred in Vancouver and Toronto. And the rest of the country has little sympathy for the plight of millennials and lower income workers in those cities.
      There used to be somewhere to flee … major demographic shifts are possible in the U.S, and used to be in Canada (e.g. the massive anglo exodus from Montreal) but to find jobs and affordable housing in Canada you no longer go west or east young man/woman.
      And we’re talking about 3 levels of government hell bent on dramatically increasing population density, and to what end?
      In human trafficking terms, it’s not a captive market.

      • Reply
        vnm 1 week ago

        oops, make that in human trafficking terms it’s a captive market.

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