Canadian real estate markets are still cooling around the country. Canadian Real Estate Association (CREA) numbers show only two markets saw SNLR improvements in October. The indicator, used as a gauge of demand, fell fastest in some of Canada’s largest real estate markets.
Sales To New Listings Ratio
The sales to new listings ratio (SNLR) is a quick way to gauge real estate market demand, and is used by CREA. It sounds fancy, but it’s just the ratio of sales to the number of new listings. The concept is, by measuring same month absorption, you can tell how hot or not a market is.
Reading it is straightforward. If the ratio rises above 60%, it’s a “seller’s market” – when a seller can ask for more. When the ratio falls below 40%, it’s a “buyer’s market” – when a buyer can ask for more. Anything between, and it’s considered “balanced.” One should exercise caution when the ratio is moving fast. Sometimes a fast moving ratio only makes a “pit stop” in balanced, before flipping higher or lower.
Editor’s Note: If you’re a Vancouver real estate agent about to email us, stop here. Please look up the difference between the SNLR and sales to active listings ratio (SALR) before you do. We’ve started a list of agents that have contacted us, demonstrating they don’t know the difference. It’s getting embarrassingly long, and strangely only contains agents from Vancouver.
Ontario Real Estate Markets Still Lead Demand, Just Not Toronto
Real estate markets with the highest ratios were all located in Southern Ontario. Windsor-Essex had the highest ratio at 75.8 in October, down from an even higher 79 last year. London reached 75.7, down from 79.4 last year. Ottawa had the third highest with a ratio of 69.4, moving higher than last year’s 63. Demand is cooling in the top two markets, although it’s still very high.
Sales To New Listings Ratio – October 2018
The sales to new listings ratio in Canadian markets with more than 500 sales in October.
Source: CREA, Better Dwelling.
Western Canadian Real Estate Markets Have The Lowest SNLRs
The Canadian real estate markets with the lowest ratios were in Western Canada. Edmonton had the lowest at 45.3 in October, down from 48.9 last year. Calgary was a little higher at 47.4, down from 54.1 last year. Vancouver was third lowest at 48.4, down from 65.6 last year. You may have noticed that even the lowest SNLR for a major Canadian market still isn’t in buyer’s market territory.
Only 2 Canadian Real Estate Markets Saw Improvements
The biggest gainers were the only two to see gains – Montreal and Ottawa. Montreal’s SNLR reached 68.7 in October, up 12.25% from last year. Ottawa’s SNLR reached 69.4, up 10.16% from last year. Both markets had previously lagged the general market for years, so it’s easy to see them playing catch up.
Sales To New Listings Ratio Change – October 2018
The percent change of sales to new listings ratio in Canadian markets with more than 500 sales in October.
Source: CREA, Better Dwelling.
Vancouver Real Estate Leads Lower… By A Lot
The biggest losers this month were in Western Canada. Vancouver real estate saw the ratio fall to 48.4, down a massive 26.22% from last year. Victoria in a distant second saw the ratio reach 63.1, down 15.53% from last year. Calgary in third at 47.4, down 12.38% from last year. For those curious, Toronto hit 49.4%, down 9.69% from last year. These markets all saw huge declines, but once again none have reached buyer’s market territory.
Canadian real estate markets are cooling, but none are a complete “buyer’s market.” Segments in places like Vancouver may have reached that mark, but no complete market is in the region. Higher interest rates and tighter lending are on course to get worse, which could change that soon.
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