Canadian Real Estate Sales See Worst April Since 1984, Montreal and Toronto Lead Lower

Canadian real estate sales have dropped to the lowest level in a generation. Canadian Real Estate Association (CREA) data shows sales fell in April. Slower growth was expected going into this month, however not this slow. The volume for the month was the lowest since 1984 – when the population was a third smaller.

Canadian Real Estate Sales

Canadian real estate sales slipped to a generational low. There were 16,612 seasonally adjusted sales across CREA in April, down 56.8% from the previous month. Unadjusted sales came in at 20,630 for April, down 57.6% from a year before. Most of the slowdown was obviously due to the pandemic, however not all of it.

Canadian Real Estate Sales

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

Source: CREA, Better Dwelling.

Slower growth was expected before the pandemic, due to the comparison period. The months in the first quarter of this year were being compared to negative growth last year. Comparing it to negative numbers last year, makes the acceleration seem more impressive than it is. Due to the pandemic, the numbers are obviously worse than they would have been under normal circumstances.

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.

National sales volumes have been sliding for a few years, but this is like nothing seen in a long time. April sales peaked in 2016, and have had trouble challenging that high. Last month was the worst April since 1984. This is easily explainable by the pandemic, but the lack of sales volume still has broader macro market consequences – regardless of the reason.

March Canadian Real Estate Sales

The number of sales reported through the Canadian MLS in the month of March.

Source: CREA, Better Dwelling.

Vancouver Real Estate Was One of The Least Impacted

All markets have seen an impact, but some markets saw declines of less than half. Winnipeg saw the smallest drop with 739 sales in April, down 36.2% from last year. Vancouver follows with 1,119 sales, down 39.5% from last year. Halifax came in third with 354 sales, down 47.2% from last year. Winnipeg and Vancouver have both slipped for two consecutive years.

Canadian Real Estate Sales By Market

Canadian real estate sales breakdown for selected markets.

Source: CREA, Better Dwelling.

The largest drops were in Eastern Canada, with Montreal and Toronto taking big hits. Montreal reported 1,890 sales in April, down 67.1% from last year. Toronto followed with 2,975 sales, down 67.1% from last year. The Niagara region came in third with 213 sales, down 64.6% from last year. Both Niagara and Toronto are in the same economic region, and both slipped for a second April in a row.

Canadian Real Estate Sales Change By Market

The percent change in Canadian real estate sales for selected markets.

Source: CREA, Better Dwelling.

The insights in this month’s numbers aren’t as clear as most analysts claim. Sales are predictably down, due to pandemic measures – that’s obvious. Sales will rise as the pandemic measures are lifted, that’s also obvious. What isn’t clear, is whether the volume can be made up without driving prices lower. The Bank of Canada is forecasting mortgages in arrears will triple over the next few months. They don’t see the arrears rate peak until next year – and this a conservative, anti-fear mongering forecast. If that happens, some buying volume may be delayed as people wait for the air to clear in the market.

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  • Li 4 years ago

    That’s about $1.6 billion in spin off activity dropped, concentrated by regions, so Montreal and Greater Toronto take most of that loss.

    • sailedaway 4 years ago

      good thing too. time to start businesses, invent things and not just R.E

      • Li 4 years ago

        That’s spin off activity, not real estate, I’m not referring to the amount spent on real estate. This is from the real economy, since one person’s spending is another person’s income.

  • sailedaway 4 years ago

    Real estate is irrelevant, the money spent on this does not go to the real economy.

    A recession, a reckoning is the best thing that could happen to Canada.
    Investment must go to business, not housing badly made out of beaver barf.

  • Joseph 4 years ago

    One thing that might catch people off guard is the workmanship on new builds. Lots of people bought new over the last 10 years. But a lot of these news builds are horrific. I’d almost be tempted to say that the majority are horrific.

    Makes me wonder if the builders were looking to some secret green initiative where the current houses have a 30 year life span, then they get recycled or simply disintegrate. The shortcuts, the sloppiness, the lack of quality product, etc.

    Once it gets to the next buyer’s market and a person has to make a decision between two equally priced houses, both in locations that are preferred by the buyer, I think the next logical determining factor might emd up being the house workmanship.

    Just my two cents.

    • Joseph 4 years ago

      Correction; that was my 10 cents, seeing how the Canadian penny is no longer manufactured.

      • Paul 4 years ago

        I like the term beaver barf. I think it describes the use of OSB as cladding for the houses pretty accurately. For sure there are issues with the quality of the new builds.

    • Avery2 4 years ago

      During housing manias I’ve seen the workmanship deteriorate on the larger projects, many times resulting in water intrusion leading to major mold damage.

    • Darren Stone 4 years ago

      I’ve been watching wood frame condos going up during the winter in Victoria for years. Uncovered and drenched with rain for months. I would never buy one. They will be rotting garbage in 10 years.

  • Manoj 4 years ago

    This is the one and only opportunity for Canadians to free themselves from having to deal with the ORGANISED REAL ESTATE machinery. What i mean is the corrupt CREA, CMHC, the local RE Brokerages and their COWBOY commission agents. Who are the frontrunners with a BOILER PLATE contract that is written to protect the SELLER and the BUYERS Realtors commissions. It has no protection for the BUYER. Totally anti-consumer! Once you pay the deposit you are screwed, there is NO WAY OUT.

    In today’s world we have Google why do we need agents who charge more than $30,000 plus taxes on a $1Million property. Sellers can simply advertise their properties and agree a price and each party goes to a Conveyancing Solicitors who wll draw up a contact of sale etc and you exchange on the agreed date. All done for just the cost of $1500 for the Conveyancing fees and $1000 for surveys etc.

    Just my two cents 🙂

  • Moses 4 years ago

    BUYERS should STAY ASIDE until another wave of Pandemic hit which will be AUG-SEP-OCT, people DO NOT pay what SELLER are asking, This is BUEYRS time
    if you don’t get the price you want (F it..) wait for another one.

    Toronto housing market much needed price adjustment and this is the PERFECT time. BARGAIN……..BARGAIN……..BARGAIN……..BARGAIN……..BARGAIN……..

  • Darren Stone 4 years ago

    16,612 buyers just made the mistake of a lifetime.

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