Canada

Vancouver Real Estate Falls To Bottom of The List For Demand, Ottawa Tops

Canada’s fast moving real estate market is still seeing demand shift to the East Coast. Canadian Real Estate Association (CREA) data shows the sales to new listings ratio improved in July. On the national level, there was only a small increase. However, that’s because large gains in the East, are being weighed down by large drops in the West.

Sales To New Listings Ratio (SNLR)

The sales to new listings ratio (SNLR) is one of the measures the real estate industry uses to gauge demand. It’s the ratio of sales in a month, expressed as a percent of new listings to hit the market. The higher the number, the stronger the rate of absorption. Markets with high rates of absorption are low on inventory for the current demand. Basically, it’s a quick way to see how supply is doing.

Once the research is done, reading the indicator is straightforward. When the SNLR is below 40 percent, it’s a buyer’s market, and prices usually fall. If the ratio is above 60 percent, it’s a seller’s market, and prices generally rise. Between 40 and 60 percent, the market is balanced, and the market is priced right for now. There’s a few caveats, but the one that stands out is change. When the ratio is fast moving, it often means the market will act like a market in the direction its heading.

Ottawa and Eastern Canadian Real Estate See Biggest Increases

Biggest increases on the SNLR were in Gatineau, Halifax, and Ottawa. Gatineau’s made the biggest increase with the SNLR reaching 65.8% in July, up 10.6% compared to last year. Halifax followed with an SNLR of 71.5%, up 8.7% from last year. Ottawa came in third with an SNLR of 74.9%, up 7.3% from last year. Over half of major real estate markets in Canada saw SNLR improvements last month.

Sales To New Listings Ratio

The sales to new listings ratio in Canada’s largest residential real estate markets.

Source: CREA, Better Dwelling.

British Columbia Real Estate Markets Lead Lower

British Columbia real estate markets are still the fastest cooling in the country. Fraser Valley has the fastest falling SNLR at 45.7% in July, down 15.3% from last year. Vancouver fell to 39.9%, down 14.5% from last year – putting it in second. Victoria followed with a SNLR of 57.7%, down 7.8% from last year. Vancouver is the only major real estate market in a buyer’s market by SNLR.

Sales To New Listings Ratio Change

The percent change in sales to new listings ratio in Canada’s largest residential real estate markets.

Source: CREA, Better Dwelling.

Toronto Real Estate Sees Improvements, But It Was Mild

Toronto real estate didn’t top or bottom the list, but it did see the SNLR climb. Toronto’s SNLR reached 53.1% in July, up 4.1% from the same month last year. The improvement still falls 13.79% below the level seen in 2017. The market is currently in balanced territory, and not quite back to where it was in 2017.

Vancouver Real Estate Keeps Seeing Demand Drop

Vancouver real estate inventory is high for the demand, even with last month’s rise in sales. The region’s SNLR fell to 39.9% in July, down 14.5% compared to last year. This represents a decline of 36.96% compared to the ratio just two years ago. The region is currently the only major real estate market in a buyer’s market.

Montreal Real Estate Demand Is Rising To Unsustainable Levels

Montreal real estate is seeing inventory get tight, even though it has yet to see a frothy price surge. Montreal saw the SNLR rise to 74% in July, up 7.2% from last year. The ratio is up 23.33% from July 2017. Montreal didn’t see a surge in sales or prices over the past few years, so the market is playing a bit of catch up. The market’s price increases lag the national movement over the past five years.

Overall, the market only made a small movement higher on the national level. Eastern Canada, including parts of Ontario, are seeing higher demand compared to inventory. Meanwhile British Columbia’s markets, which had previously led the country, are leading lower.

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26 Comments

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  • Marc 3 weeks ago

    British Columbia is falling because they’re actually cracking down on dirty money. Toronto and Montreal are both welcoming it, and forcing real families to chase prices higher along side criminals.

    • RBC Royal Birds of Canada 3 weeks ago

      It’s hard to get jobs in Toronto, and even wore in Montreal as one has to be an aristocratic French/bilingual speaker. Salaries are also lower in Montreal.

      At the rate that the government of Canada facilitates money laundering in real estate by global organized crime, we will live in a neo-feudal society and as serfs.

      The Canada we used to live in has dramatically changed over the decade due to this scandal of money laundering, but no, the government would rather monitor what people post online than to stop an organ harvester from the Far East parking his dirty money using a nominee working at the Big five banks in Toronto.

    • george 3 weeks ago

      Could you please share the info regarding BC cracking down dirty money? Thanks!

    • Mtl_matt 3 weeks ago

      Gotta love BC mental gymnastics. You’re probably basing this on Maloney’s baloney report that could have been titled “But Alberta” or “Based on this model we’re pretty clean”.

      Where does record low unemployment in Quebec and 6.2% yoy wage great factor into “it’s all dirty money” argument?

      • Ethan Wu 3 weeks ago

        > “it’s all dirty money” argument?”
        No one said it’s all dirty money, but the reason Canada is an “investible” place since the 1990s has to do with the way the country’s laws position itself as a country for transfer pricing. Due to the fact that Canada has generous transfer pricing rules, it’s hard to track who’s doing what and when. Actually, it’s virtually impossible by design.

        Dirty money has an association with violent and drug crime, but most often it’s white collared crime like tax evasion. Which is still criminal, but everyone hates taxes, so they don’t really care about that. That’s how Canada can have politicians dodge taxes , and no one bats an eyelash.

        It’s a pre-cursor for picking a market like that. First, for widescale tax evasion or “money laundering,” you need infrastructure. Toronto and Vancouver have had circumvention infrastructure for *decades*.

        If you wanted to get your money out of HK, all you needed to do was buy a house and they would make sure not to ask any questions, assuming it’s all legit. This is also an issue that OSFI, the bank regulators, essentially acknowledged was a situation as well.

        Government tax receipts weren’t required to get mortgages for people that showed up with 35% in down payment until 2018. Canadian banks even open multiple accounts for people, allow unknown people to transfer large amounts of money to the accounts, and then aggregate the deposit afterwards. China had to step in and partially deal with this issue, but that doesn’t impact other countries doing it.

        > “Where does record low unemployment in Quebec and 6.2% yoy wage great factor into”
        Those are pre-cursors for a market to do these things. You money launder in places where there’s no action. You need people like you to go, “it’s the wages and unemployment!” Even though there’s places that are much more dense, with less housing, with higher wage growth experiencing lower price gains. This was a good read, you should check it out.

        https://betterdwelling.com/how-a-little-money-laundering-can-have-a-big-impact-on-real-estate-prices/

  • Kathleen Thomson 3 weeks ago

    US rising on trade war resolve, but people are ignoring falling investment.

    https://www.theglobeandmail.com/business/article-us-core-capital-goods-orders-rise-shipments-tumble/

    • Raj 3 weeks ago

      Sounds like the market. Wouldn’t be a bubble if people paid attention to fundamentals. All about the feels.

      • Doc Holiday 3 weeks ago

        Short Term! Nothing in Canada or the world compares to Vancouver. Vancouver will always be a high desirable place to live – only if you have the funds.. Big demand and will always be for the long term. It’s the California of Canada and gateway to Asia.

  • Bruno 3 weeks ago

    Canada responds to the bubble by lifting rent caps.

    Germany responds to the bubble by placing rent caps.

    https://www.telegraph.co.uk/news/2019/08/26/berlin-rent-cap-could-slash-prices-half/

    The difference is Canada is a resource economy, whereas Germany is an innovation economy. We can push prices higher, and devalue the dollar to make foreign investment in natural resource development cheaper. Germany needs people to do engineering, and innovation without leaving the country.

    Canada can push around Canadians a lot longer, and a lot further to “drive” investment. If German’s get screwed, they have skills that easily export. Try exporting an economy where 1 in 7 people only work to warehouse other people.

    • RBC Royal Birds of Canada 3 weeks ago

      People in Toronto are being smeared by the media and jailed for posting or publishing incorrect thought, but a money launderer who kidnapped and murdered thousands of infants for their organs somewhere in the Middle East or Asia has more rights than us when laundering money into Toronto condos or AirBnBs. Shame!

  • Millennial Whinger 3 weeks ago

    Some very awful xenophobia and victim mentality on display in the comments here today. Disgusting.

    • Dave 3 weeks ago

      “xenophobia and victim mentality” 🙄

      And I’m sure saying Vancouver is overbuilding means people are racist, and just jealous. Pretending to be offended when you don’t like facts is so 2015. There’s literally nothing in the comments that is xenophobic OR a display of victim mentality.

      • Bluetheimpala 3 weeks ago

        Oh Dave, the stench of pickup hockey, rush (full disclosure rush is tits) and coors light is palpable as of late. Today was tame/lame but this ass-end of the internet has cultivated quite the following of chinese trolls and political plebes. We’ve got some goodies but they are dropping off. Lemme break this down, In an anglo society ‘us vs them’ is always a case of older white males who feel generational wealth is owed to them vs basically everyone else. Sooo many snowflakes complaining about money laundering, foreigners, the liberal government, justin trudeau, the BOc which JT controls (lol!), and some other trash, sounding hella ignorant and just kinda dumb. Get some 88s in here and it becomes a shit slurry pretty quickly. This is not a wild wings where you and a guy name Dougie talk shit loudly about the one muslim guy in the bar who is probably just dark skinned but is basically ISIS. Right? Contribute. Sure swing a dick, i do, but if you don’t see the grossness of what is being posted then…ahh shit dave, i can’t lie anymore…I’m pretty well off and life is great and am a white male in his 30s. I try very little and richer each year as my wife stays at home and raises my 3 kids. No debt. Love chilling. I’m happy for guys like you to blame ‘them’ as me and my family hollow out guys like you, i can always buy you a coors at the bar and pat you on the head. In all seriousness, be a decent human and Blue will be decent too! See you tomorrow big D! BD4L.

        • Morty 3 weeks ago

          Hi Blue,

          I am also a successful white male in my 30s. No debt, my own consulting business and owner of 3 homes and commercial property. Power to us. What do you do for a living?

    • Alice 3 weeks ago

      Children being murdered for their organs in China, India or Bangladesh to enrich the owners of the downtown Toronto One Bloor, Aura and other 70+ storey towers is something that we should condemn. No child should be murdered to build more luxury condos.

      • Millennial Whinger 3 weeks ago

        And you get this information from where?

        Just because you feel something is the correct doesn’t make it so.

        It’s all in your head.

  • Straw Walker 3 weeks ago

    I think the economy is more of a concern now than house prices.
    The Germans are now selling negative bonds..You pay to own them..Not a good sign
    I think the stock market is in for some big correction…watch out for Oct. this year..A couple of thousand point drop is not out of the question,.. Cash Is King…don’t invest it or spend it..

    • Bob 3 weeks ago

      If the market drops a few thousand points, cash will not be king: gold will be, shorts will be , volatility will be. Lots of ways to profit off of it if you are a true believer.

    • Scheinova 3 weeks ago

      You also pay colleges and universities here in TO the privilege to work for no pay for greedy employers!

      The industralized West is a facade of corporate greed!

  • Rana 3 weeks ago

    Keep holding cash until bananas are $1.50 per lb

  • Louis 3 weeks ago

    BD seems to reference the highs of 2017. Just wondering, can anyone explain why this is done so often? I mean, that was a blow out year with housing going up 30% y/y in some parts. Everyone here mentioned it was entirely absurd and not sustainable, which turned out to be the case. But why use it as a reference of a strong healthy market then? Just because the market isn’t as strong as it was in 2017 doesn’t mean it’s in terrible condition. I will add that benchmark prices are almost back to 2017 levels though.

    • OM 3 weeks ago

      Wonders why BD references 2017 data. Follows with a reference to 2017 data. The dumbest guy in the room, ladies and gentleman.

      • Louis 3 weeks ago

        LOL. I’m the dumbest guy, yet everyone here thinks the housing is going to keep going down yet it’s only been going up.

    • Aldi 3 weeks ago

      Louis
      Thanks for pointing this out,comparing everything to the supercharged level of 2017 for single detached homes underpins much of the analyses that goes on in this board.
      The reason that it did not lead to utter turmoil in that segment is so few units transacted at that level and it was not a result of some black swan event but policy-induced

  • Straw Walker 2 weeks ago

    Canadian Laws and their enforcement have been and will continue to be totally ineffective in regards to Drug Laundering. Our legal system has been compromised.

    The only way going forward to discourage Chinese Drug launders from Purchasing Canadian homes or buying front companies to launder their money, is by taxing them or over regulating them.
    The taxes and regulations have to so overburdening that they choose to go else where.

    Our governments and our legal systems are totally ineffective.

Comments are closed.