Canadian housing

September Home Sales Decline in Nearly 70% of Local Markets Across Canada

Steve Saretsky -

It appears higher borrowing costs and tighter lending conditions are working their way through the Canadian housing market. Per The Royal Bank of Canada housing has not been this unaffordable since 1990. As a result, sales activity has slowed significantly, total home sales across the nation fell 9% year over year in September. It was the fewest sales for the month of September in six years.

According to the Canadian Real Estate Association, home buyers retreated across the country, “About 70% of local markets were down on a y-o-y basis, led primarily by declines in major urban centres in British Columbia, along with Calgary, Edmonton and Winnipeg.”

Canada home sales percent change
Y/Y Percent change in home sales for September 2018

Meanwhile, active listings across the nation ticked higher by 2% year over year, bringing the national sales-to-new listings ratio to 54.4% in September compared to 56.2% in July and August. The long-term average for this measure of market balance is 53.4%.

As a result of fewer sales and rising inventory, the average sales price remained virtually unchanged from September 2017, increasing just 0.2%, or negative when adjusted for inflation. The MLS Home Price Index Benchmark Price suggested a more rosy outlook, showing a slight gain of 2.28%. Price inflation topped out in Victoria +9%, and Ottawa at +7%.

Canadian home prices
Canadian home prices per CREA

As home sales stall and prices decelerate rather quickly, the uncertainty appears to be worrying the real estate development community. According to the most recent data from CMHC, “The national trend in housing starts stood at a 19-month low in September, following declines in four of the last five months, The slowdown in the pace of new residential construction activity in recent months is a result of both lower single-detached and multi-starts activity and brings new residential construction closer to its long run average from the elevated levels registered in 2017.”

Across Canada, the seasonally adjusted annual rate of housing starts slipped by 5% from August to September.


Join the Monday Newsletter

Every Monday morning you'll receive a short and entertaining round-up of news on the Vancouver & Canadian Real Estate markets.

"*" indicates required fields

The Canadian Economy

Steve Saretsky -

Happy Monday Morning! We got a string of new data this past week confirming inflation in consumer goods, and housing are proving to be more than transitory. Canada’s consumer price index continued to drift higher with prices hitting an 18 year high, up 4.7% from last October. The recent floods in BC...

Steve Saretsky -

The calls for impending interest rate hikes continues. CIBC’s chief economist, Benjamin Tal, was out recently suggesting the Bank of Canada could hike its benchmark interest rate at least six times beginning in early 2022. “I think there is a risk of getting into the market at today’s rates,” noted Tal....

Steve Saretsky -

The BC Government announced it is looking at several cooling measures for the housing market in 2022. They have highlighted two measures. The first is an end to the blind bidding process, and the other is a mandatory “cooling off period” which will allow any buyer a 7 day recession...

Steve Saretsky -

The Bank of Canada continues to slowly drain liquidity after flooding the system with a firehose of cash during the pandemic. Bank of Canada governor Tiff Macklem announced the end of Canada’s QE program (also known as money printing). Furthermore, in Macklems words, “We expect to begin increasing our policy...

Steve Saretsky -

Consumer price inflation ripped higher in September, surging 4.4% year-over-year, the fastest pace of price increases in 18 years. Let’s discuss this further. We have an inflation problem and the Bank of Canada remains of the view that inflation will be transitory. Although they really can’t say otherwise, for if...

Get the Saretsky Report to your email every month

The Saretsky Report. December 2022