Canada

Toronto Real Estate Sales Lead Canada For Growth, BC Leads The Declines

Canadian real estate sales continue fall to new lows. Canadian Real Estate Association (CREA) numbers show only 3 markets with more than 500 sales had year over year growth. Those that did see growth, only saw mild growth compared to previous years. The exception is Toronto, but that isn’t what it appears to be either. We’ll get to that in a minute.

Canadian Real Estate Sales Fall Nearly 2%

Real estate sales continue to fall across Canada. CREA reported 38,612 in July when seasonally adjusted, a 4.22% decline from last year. Unadjusted, a.k.a. actual sales came in at 41,872 sales, down 1.71% from last year. Both numbers make this the worst July for real estate sales since 2012.

Canadian Real Estate Sales

The unadjusted sales of all types of homes, as reported through the Canadian MLS.

Source: CREA, Better Dwelling.

Toronto Is The Fastest Growing Real Estate Market… Kind of

Only 3 real estate markets with more than 500 sales showed positive growth, so that puts them in the lead. Toronto recorded 6,961 sales in July, up 17.56% compared to last year. Ottawa saw 1,621 sales, up 5.06 from last year. Montreal saw 3,201 sales, up just 1.07%. Toronto seems to be moving much higher, but a little historical context helps.

Canadian Real Estate Sales By Market

Canadian real estate sales in markets with more than 500 sales.

Source: CREA, Better Dwelling.

Last July, Toronto printed one of the worst Julys in the market’s history, due to policy changes in Ontario. Buyers say on the sidelines, waiting for the impact to be felt from these changes. This created a few months of unnaturally low sales data, than would occur in a normal market. That makes year over year growth appear huge, and it is, but it’s less important in context. This is still the second worst July for Toronto in nearly two decades.

The Largest Declines In Real Estate Sales Are In BC

The markets with the fastest falling sales in July were all located in British Columbia. Fraser Valley reported 1,230 sales in July, a decline of 33.94% – making it the worst in the country. Vancouver reported 2,108 sales, a decline of 30.01%. Victoria reported 609 sales, a decline of 19.02%. The province has seen prices soar in each one of these markets, which may have led to a FOMO pop in sales. Now sales numbers across BC are slowly coming back to reality.

Canadian Real Estate Sales By Market – July 2018

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

Source: CREA, Better Dwelling.

Canadian real estate sales declining across the country show local factors are secondary. Higher interest rates and tighter mortgage lending is starting to hit consumers. Combine that with home prices near record highs, and it’s pretty easy to understand the decline in sales.

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12 Comments

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  • Ian 10 months ago

    Vancouver’s market collapses right when the government begins a money laundering operation. I’m sure it’s a coincidence.

    • Live From Food Truck Central 10 months ago

      I think people in Vancouver forget that their market has only really been like this from 2015 to 2018. It seems like forever, but before that it was relatively flat for 10 years.

    • Norbert Schumacher 10 months ago

      You’re welcome to your opinion, but I’d suggest you read some of the other articles on this site. In my opinion, the writing as been on the wall for Vancouver since Feb 2016. The OSFI guidelines were the first nail in the coffin (Jan 2017). Locals need to take ownership of the ridiculous economic situation they created rather than looking for scape goats and excuses.

      I think you’re a little premature on your assertion that the government has started cracking down on money laundering – its all rhetoric so far. The BC NDP haven’t done anything but inherit the housing problem and will take the blame when it all goes wrong.

      You are also a little premature on calling the real estate market “collapsed”. You might want to close your eyes when the prices do actually start to drop one day.

  • Mica 10 months ago

    Toronto sales rising are a crock. Detached houses have been sitting on the market for months now. The rise must be entirely in the condo segment, which makes me wonder where these condo units were the whole time?

    • Moss 10 months ago

      It says right in the article: “Last July, Toronto printed one of the worst Julys in the market’s history, due to policy changes in Ontario. Buyers say on the sidelines, waiting for the impact to be felt from these changes. This created a few months of unnaturally low sales data, than would occur in a normal market. That makes year over year growth appear huge, and it is, but it’s less important in context. This is still the second worst July for Toronto in nearly two decades.” The YoY growth is misleading because of how bad July ’17 was.

  • Dave 10 months ago

    Yikes, Vancouver is falling to cow town levels of sales.

  • Junk 10 months ago

    “Canadian real estate sales continue fall to new lows. … (CREA) numbers show only 3 markets with more than 500 sales had year over year growth. ”

    Regardless of how important this indicator actually this, this can’t help but read like grasping at straws.

    • Isaac 10 months ago

      I’m guessing you don’t work in finance, or you’re a Realtor?

      The reason it’s important is real estate sales are closely tied to mortgages issuance. Falling sales mean less originations, which mean a tighter lending criteria to balance risk. This forces rates higher, feeding the whole cycle lower.

      • Yuzheng 10 months ago

        Is there more I can read on the impact of sales declines and credit?

  • Michael 10 months ago

    It would be interesting to see the numbers in Toronto overlayed on top of mortgage originations from the big 5 banks, too see how much of these sales have moved into the private lending segment.

  • NJ 10 months ago

    Toronto market boom will be short lived and its a bull trap…or even a confusion phase…stage is well set for the fall..hang on tight mates…

  • ZezoMania 10 months ago

    I think it’s a fake dawn, a bull trap.

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