Canada

Vancouver Real Estate Is Once Again The Fastest Cooling Market In Canada

Canadian real estate markets are seeing demand improvements, just not in British Columbia. Canadian Real Estate Association (CREA) data shows the sales to new listings ratio (SNLR) increased in August. The ratio, which gives a quick snapshot on how soft the market is, generally increased. British Columbian real estate was a notable exception. Cities in the province were the three fastest cooling markets in the country.

Sales To New Listings Ratio (SNLR)

The sales to new listings ratio (SNLR) is one of the measures the industry uses to gauge demand. The ratio is exactly what it sounds like – the ratio of home sales, to the number of new listings for homes. It’s one of the measures of absorption the industry uses, to understand replenishment. It’s straight forward – the higher the ratio, the slower inventory replenishment. This generally leads to higher prices. The lower the ratio, the longer it’ll take to absorb the inventory. This generally leads to lower prices.

There’s a few key points the industry likes to watch, and even gives cute names to. When the ratio is above 60%, the market is a seller’s market – where prices are expected to rise. Below 40% and the market is a buyer’s market – where prices are expected fall. Between 40% and 60%, the market is considered balanced, and prices are just right. Of course, some markets a more sensitive to ratio than others, and it’s just a guideline. Obviously, use multiple data points before trying to gauge where the market is going to head.

Eastern Canadian Real Estate Is Seeing The Biggest Increases

Eastern Canadian real estate markets made the biggest jumps in SNLR. Gatineau made the biggest climb with its SNLR reaching 66.7% in August, up 11% from last year. Halifax was in second with the ratio hitting 72.5%, up 9.1% from last year. Montreal was the third fastest growing major market at 74.8%, up 7.4% from last year. Most of these markets experienced very low price growth over the past few years. Even with Montreal’s high SNLR, price growth over the past 5 years is half of what Toronto and Vancouver have seen.

Sales To New Listings Ratio

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

Source: CREA, Better Dwelling.

B.C. Real Estate Leads The Market Lower… Again

B.C. real estate markets are once again leading lower, after taking a break for most of the summer. Vancouver made the largest decline with an SNLR of 40.5% in August, down 12.3% from last year. Fraser Valley came in second with a ratio of 46.6%, down 12% from last year. Victoria did a little better with a ratio of 58.1%, down 6.7% from last year. A little surprising, considering cities like Vancouver saw a big jump in sales last month. However, it also saw a big jump in inventory for the month as well.

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 didn’t fit in either extremes, but did outperform national growth. The ratio for Toronto reached 53.7% in August, up 4.6% from last year. To contrast, the national aggregate hit 56.6, up 0.7% from last year. The market in Toronto is a little more loose than the national number, but it’s growing faster.

Overall, Canadian real estate markets are seeing demand improve, compared to last year. Eastern Canada saw the biggest boost, after underperforming for years. B.C., which led price growth over the past few years, is predictably finding a better balance.

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12 Comments

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  • Ed 3 months ago

    Why is BC being left out of this rally?

    • george 3 months ago

      small crackdown on money laundering done by the local government.

    • John 3 months ago

      Because it’s a world class city and prices only go up! They aren’t making any more land! People will pay the price to be in Vancouver!

      Oh wait, you said why is BC being left out…

    • Skylar Zerr 3 months ago

      Money Laundering measures has the foreigners & money launderers scared.
      Turns out criminals really enjoy their money and foreigners don’t like 20% tax.

  • Mtl_matt 3 months ago

    I heard an odd ad on the radio last weekend. It was from one of the biggest realtors in the rich area of Montreal. It basically went “Prices went up a lot but shouldn’t go up from here, don’t wait until next summer to sell”.

    I’m thinking they’re low on listings and even though price rose they’re trying to motivate sellers to list now instead of the future. What else could it be?

    I also frequently get fliers in my mailbox from agents if I considered selling my house (in the suburbs).

    • SUMSKILLZ 3 months ago

      A dozen realtors a month must pester my mom to sell her south shore home. The problem with flattery is you always want more. Its fun. Its exhilarating. Why pull the trigger now? Each house on the street sells for a bit more, so hold out for more. It hasn’t been this exciting in south shore Montreal real estate since 1966!

    • Hiya 3 months ago

      Because it is a seller’s market and it is easy money if they can get a listing. They have identified the fears of their clients – that prices will go up further so they shouldn’t sell, or that prices will go down so they should sell now. They address this in the ad by saying they should sell now.

  • DB 3 months ago

    China is slapping us around a little…Don’t forget the foreign buyers tax only keeps honest immigrants/families from buying in. The ones with endless supply of cash will still come in because they are laundering money that should have been taxed in the first place back in their country.

    • SH 3 months ago

      An immigrant is not a foreign buyer and therefore not subject to the tax. You clearly have no clue what you are talking about.

  • Jazz 3 months ago

    People with endless money are doing land banking. They can’t get this much return anywhere else.

  • straw walker 3 months ago

    How do you tax a home that is registered as a holding comp..??These holding comp. are avoiding real estate taxes so the easiest way to tax them is on an annual city tax. Any home that is owned by a holding comp. should have an additional 50% city/municipality annual tax or just increase their mil rate by 50%..Canada needs to end front comp. and their fraudulent tax evasion

  • RentWell 3 months ago

    In 2018, the Canadian housing market had a difficult year as it struggled to regain its footing following the bubble-like circumstances of last year. Hope this year will bring some good news.

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