Montreal Home Sales, New Listings Drop by About 30% Each in July: QPAREB

The Quebec Professional Association of Real Estate Brokers says Montreal home sales and new listings dropped by about 30% each in July, compared with July 2020. The association says the month was a continuation of the substantial decreases in sales that began in May and a signal that the market is returning to pre-pandemic levels.

The board says 3,799 homes were sold in the market in July, down from 5,324 in the same month last year. New listings totalled 4,118 last month, a drop from 5,918 the previous July.

The association says the median price of a single-family home rose by 18% from July 2020 to reach $500,500 in July 2021, while condo prices climbed by 16% to reach a median of $360,000.

Charles Brant, the director of the association’s market analysis department, says the figures are a shift from last July when the region saw a “spectacular” level of sales. “While this slowdown is partly due to a drop in active listings of single-family homes to historically low levels, it can also be explained by the shrinking pool of buyers who can afford a property at current market prices,“ he says, in a release. “However, we have indeed seen a slowdown in price increases and a levelling off of price changes since the spring, for all property categories combined.”

Source: The Star

Vancouver July Home Sales Were Down 11.6% From June, 6.3% From Last Year:  REBGV

The Real Estate Board of Greater Vancouver says home sales, listings and prices cooled somewhat in July after a frenzied start to 2021, but still climbed from last year. The B.C. board says home sales in the region totalled 3,326 in July, a 6.3% increase from the 3,128 sales recorded in July 2020 and an 11.6% drop from the 3,762 homes sold in June. 

The board says sales last month were 13.3% above the 10-year July sales average. The number of homes listed for sale in the market reached 9,850, an 18.5% decrease from 12,083 July 2020 and a 9.1% decrease from 10,839 in June 2021. The board says the Home Price Index composite benchmark price hit $1,175,500 in July, which is a 13.8% increase from July 2020 and no change from June.

The board’s economist Keith Stewart says the figures show price growth has levelled off in most areas and home types. “Moderation was the name of the game in July,” says Stewart, in a release. “Home sales and listings fell in line with typical seasonal patterns as summer got going in earnest in July.“

Source: The Star

Calgary Home Sales Slowed in July but Still Reached a Record High: CREB

Calgary Real Estate Board says home sales slowed in July but still amounted to the best July on record. The Alberta board says sales for the month totalled 2,319, up from 1,835 July 2020 but down from 2,915 in June 2021.

The number of new listings in the market reached 3,296 in July, up from 3,021 at the same time in 2002 and down from 4,135 in June 2021. The average price of a home was $488,501, up from $466,266 last July and down from $494,111 in June.

CREB says an easing in sales growth and a slowdown in the pace of new listings has prevented monthly gains in inventory levels. While supply remained higher than July 2020, CREB says apartment and row homes accounted for most of the available properties.

Source: The Star

Home Sales in Toronto Suffer Fourth Straight Month of Decline, as ‘Sense of Calm’ Sets In

Toronto’s housing market extended its slowdown in July with the fourth straight month of declining sales and flattening prices, as the province reopened more widely and the desperation to find bigger properties eased. There were 9,390 home resales in the Toronto region in July, down 15% from the same month in 2020, and down 2% from June on a seasonally adjusted basis, according to the Toronto Regional Real Estate Board (TRREB). Condos, with prices typically lower than houses, were the only type of property to see an increase in sales year over year.

Across the Toronto area, the average selling price of a home was $1,062,256, a 12.6% increase from July 2020 and 0.9% above June on a seasonally adjusted basis. The home price index, which adjusts for volatility in pricing and sales, was $1,054,300, marking the second straight month of no movement after spiking 5% in January.

“The motivation to sell or buy has gone down quite a bit. The urgency is not there,” said Katie Steinfeld, realtor with On The Block Realty Inc., who works in the Toronto region. Ms. Steinfeld said that change in sentiment started when the province began to reopen in the summer and Ontarians were able to leave their homes for non-essential activities such as patio dining.

The number of new home listings was down 31% year over year. But even though there was less inventory, there were also fewer buyers willing to get into frenzied bidding wars. “If it is going to be a bidding war, they are shying away and not wanting to compete. Buyers are coming in with lower offers,” she said.

The stricter mortgage stress test that was instituted in June had little to no effect on the current slowdown given that the rule changes were so small, realtors said.

Christopher Alexander, senior vice-president with Re/Max Canada, said this year is turning out to be similar to a pre-COVID year with slower activity in the summer. “There isn’t as much as ‘I have to buy now or I will miss out.’ People have more things to think about and do than just real estate,” he said. Both Mr. Alexander and Ms. Steinfeld believe activity will pick up in the fall.

The board’s chief market analyst, Jason Mercer, said that the “strong upward pressure on home prices will be sustained” amid supply shortages and population growth.

Source: Globe and Mail

Building Permits on the Rise in June

The total value of building permits rose 6.9% to $10.3 billion in June. Seven provinces contributed to the gain, led by Ontario, which jumped 22.7%. Construction intentions in the residential sector were up 9.1%, while the non-residential sector advanced 2.2%. On a constant dollar basis (2012=100), building permits increased 5.2% to $7.2 billion.

Ontario residential permits bounce back

High-value permits for new apartment buildings in the census metropolitan areas (CMA) of Toronto and Hamilton helped push multi-family permits up 13.5% to $3.7 billion nationally in June. Provincially, Ontario led the way, rebounding 67.8% to $1.8 billion. On the other hand, Quebec reported the largest decrease (-29.9%), pulling back from a record high in May. Construction intentions for single-family dwellings increased 4.7% to $3.4 billion. Seven provinces saw gains in this component, led by Ontario and Alberta. Overall, the value of residential building permits increased 9.1% to $7.2 billion, following two months of lower construction intentions.

Non-residential permits up slightly

Construction intentions for the non-residential sector were up 2.2% to $3.1 billion in June. Gains were reported in eight provinces, led by Alberta (+32.7%).

The value of commercial permits rose 7.4% to $1.7 billion. High-value permits, such as the Agri-food Hub and Trade Centre in the city of Lethbridge and an office building in the city of Vaughan, helped Alberta (+54.8%) and Ontario (+16.2%) to lead this component. Newfoundland and Labrador, down 92.5%, returned to more typical levels following a strong May.

Industrial permits increased 2.3% to $526 million. Six provinces showed increases, led by Ontario (+37.8%), while Quebec reported the largest decrease (-32.9%).

The institutional component was down in June, falling 6.7% to $871 million, as Ontario’s notable decrease (-37.7%) drew down the national level. Meanwhile, Quebec surged 38.4% to $359 million, as several permits issued for alternative care and senior citizen residences coincided with an initiative from the government of Quebec to increase the number of beds.

Residential permits pull down second-quarter intentions

Total building permits declined 1.7% to $31.0 billion in the second quarter of 2021 compared with the previous period. Despite this, the value of building permits remained the second highest on record and was 38.5% above the same quarter in 2020, which was heavily impacted by COVID-19 restrictions in the construction industry.

The value of permits for the residential sector fell 4.2% to $21.4 billion in the second quarter. Permits for both multi-family and single-family dwellings dropped, with seven provinces reporting decreases.

Construction intentions in the non-residential sector rose 4.5% to $9.6 billion. Although second-quarter values exceeded the values in the first quarter of 2020, non-residential permits remained below the quarterly levels of 2019. Among the non-residential components, institutional permits increased for a fourth consecutive quarter, boosted by large projects in the education and health care sectors.

Source: Statistics Canada

Looks Like Canada’s Hot, Hot Housing Market Has Peaked — Earlier Than Expected

It’s been a wild pandemic ride, but some economists are now saying that the torrid run of Canada’s housing market has already peaked, and it’s downhill from here. “March seems to have been the absolute peak of the mountain in terms of activity, a couple of months ahead of what we had anticipated in our outlook released last winter,” writes TD economist Rishi Sondhi in the report “Canadian housing outlook: Comin’ down the mountain.” 

The big question now, says Sondhi, is how fast are we going to tumble down that mountain. Canadian home sales have dropped 25% since March. Sounds like a lot, right? But considering the “stratospheric” spike seen in the first quarter, sales are still remarkably strong even after this decline. Sondhi said that if the June sales figure continued for the whole year, more than 600,000 units would be sold, beating 2020’s record. 

Beyond the fact that the pandemic housing market was unsustainable, there are a few factors that could contribute to how fast it falls. Tighter stress test rules that began June 1 is one thing that may weigh on buyers.

Another is bond yields, which TD expects will rise through next year. Yields have pulled back in recent weeks over concerns about the Delta variant of the COVID-19 virus and its economic impact, but economists don’t expect this to last long. “As the global recovery remains resilient and inflation forecasts continue to be nudged upwards, an upward trend in bond yields will likely reassert itself, taking mortgage rates along for the ride,” said Sondhi.

TD only expects a modest increase in borrowing rates with the Bank of Canada hiking once in 2022 (in the second half) and 5-year government bond yields rising by about 110 basis points by the end of 2022. But it cautions that even a quarter point increase will have a bigger impact in today’s pricey market.

The higher markets flew during the boom, the harder they will fall. Home sales have dropped 32% in Nova Scotia year to date, 20% in Quebec, and 17% in Ontario, Sondhi said. Meanwhile, home sales in the more affordable Alberta have climbed 13% year to date, the best performance in the country. TD expects this trend to continue this year and next.

Average home prices have also slipped, but TD thinks one reason behind this is that condos are now taking a bigger share of sales. Higher sales of these cheaper units should keep home price growth in check. This is the opposite of what happened earlier in the pandemic when the rush for more expensive detached homes pushed average home prices up.

Looking ahead, TD expects home price growth to strengthen in the affordable Prairies and Newfoundland and Labrador and weaken in Ontario, Quebec, PEI and Nova Scotia.

Source: Financial Post