This Week’s Top Stories: Canadian New Home Prices Fall, While Real Estate Owners Are Withdrawing A Whack of Equity

Time for your weekly cheat sheet on this week’s most important stories.

Canadian Real Estate

StatCan: Canadian New Home Prices Fall The Most Since 2009
Canadian new home prices are sliding, according to Statistics Canada. The national New Home Price Index (NHPI) fell 0.1% in July, when compared to a month before. This represents a 0.39% decline compared to the same month last year. Not a large decline, but this is the third consecutive month of deceleration. June was the first month of negative price growth. Not a trend yet, but worth watching to see if new home prices begin to dip lower.
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Canadian HELOC Debt Rises To Over $302 Billion
Canadians are using home equity lines of credit (HELOC) to tap their paper wealth. The outstanding balance of loans hit $302.2 billion in June, up 5.37% from last year. The rate of growth decelerated from the month before, but is nearly twice the pace of growth seen last year.  Growth remains below peak seen in 2017 though, so there’s that.
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Canadian Reverse Mortgage Debt Is Up Over 26% From Last Year
Senior Canadians short on cash, are raiding their equity using reverse mortgages. The outstanding balance of reverse mortgage debt hit $3.74 billion in June, up 26.3% from last year. That works out to a whopping $778.9 million in reverse mortgage debt from last year. Since borrowers aren’t encouraged to pay the debt off, this is going to snowball a lot higher from here.
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StatCan: New Condo Prices Stall In Toronto, Fall In Vancouver
New condo prices are rising at breakneck speed in markets that didn’t surge over the past few years. Ottawa saw prices rise 8.4% in Q2 2019, when compared to a year before – that’s the fastest in the country. Victoria followed with prices rising 8.3% from last year, over the same period. In third was Montreal, which saw prices rise a modest 0.5%, following a big spike last year. Previously hot markets like Toronto and Vancouver, were flat and down 1.7% over the same period. The cities outside Toronto and Vancouver must have just figured out Canada is running out of land.
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Toronto Real Estate

Toronto Detached Real Estate Sees More Sales, Higher Prices
Toronto detached real estate is seeing sales and prices rise. There were 3,618 sales in August, up 20.55% from the year before. The typical price in the region is now $943,000, up 3.07% over the same period. Sales are up 2.78% higher than the 10-year median for the month, so this is substantial growth. Home prices are still down 10% from the peak reached in May 2017. Sales for the month are back to normal, but the prices are still lower.
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Vancouver Real Estate

Greater Vancouver Detached Real Estate Sales Rise As Prices Fall To 2016 Levels
Greater Vancouver detached real estate is seeing sales rise, but prices are still falling. There were 704 detached sales in August across the REBGV, up 24.5% from last year. The price of a typical detached home fell to $1,406,700, down 9.8% over the same period. Sales are still 26.4% below the 10-year median number of August sales. Sales are up, but pretty far from normal, as reflected in how the market is treating prices.
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