After a hot couple of months, Edmonton recorded its first large decrease in the real estate market in July.
According to the Realtors Association of Edmonton (RAE), home sales dropped 23.8 per cent in July from June of this year, and saw a year-over-year drop of 10.3 per cent from July 2021.
Single-family home sales were down 12.4 per cent from July 2021 and 24.4 per cent from June 2022.
Condo sales fell 1.6 per cent from July 2021 and 22.1 per cent from June 2022, while duplex/rowhouse sales dropped 12.7 per cent year-over-year and 21.3 per cent from last month.
“This is the first time this year that we’ve seen such large decreases in our month-over-month statistics in the Edmonton real estate market,” said Paul Gravelle, board chair for the RAE.
And Gravelle says the market hasn’t bottomed out yet.
“Although July is typically a slower month for real estate due to holidays, we expect to see a continued downward trend as we get closer to the start of fall,” he said.
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Listed homes are sitting longer and selling for less, too.
Single-family homes averaged $489,370 — a five per cent year-over-year increase, but a month-over-month drop of one per cent. Those homes are sitting an average of 33 days on the market, six days longer than in June.
Condominiums sold for an average of $229,463, seeing a small decrease of 4.4 per cent year-over-year and 3.7 per cent compared to June 2022. Those are taking an average 52 days to sell, five days longer than the previous month.
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Higher interest rates are being blamed for a slowdown in real estate markets across the country.
In Toronto, July sales fell 47 per cent from the same time last year and 24 per cent from this past June.
Residential home sales in Metro Vancouver saw more than a 40 per cent decrease, comparing July 2021 to this year and a nearly 25 per cent drop in just one month.
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Real estate: Canada home prices and sales fall again – CTV News
The Canadian Real Estate Association says home sales fell for the fifth consecutive month between June and July, but the latest drop was the smallest of the five.
On a seasonally adjusted basis, the association says sales in July fell 5.3 per cent compared with June. The actual number of sales last month was 37,975, down 29 per cent compared with July last year.
“That leaves activity back in the pre-COVID range, or roughly 40 per cent below the peak of the demand-side blowout seen last year,” said Robert Kavcic, BMO Capital Markets senior economist, in a note to analysts.
“Unadjusted, it was the quietest July for sales since the financial crisis in 2020.”
July’s drop in month-over-month sales was the smallest of the past five months. Market watchers said it’s too soon to say whether that trend will continue.
Still, economists and CREA chair Jill Oudil said it is a continuation of the market cooling from the torrid pace seen last year and early this year, when bidding wars were the norm.
Much of the cooldown has been attributed to the Bank of Canada increasing its key interest rate by one percentage point to 2.5 per cent in July in the largest hike the country has seen in 24 years.
Mortgage rate changes tend to mirror such hikes, impacting buying power.
As the rates have risen and sales plummeted, many buyers have sat on sidelines, predicting better deals will come in the fall and frustrating sellers, who have had to come to terms with the fact that they likely won’t fetch as much as neighbours who sold in the winter.
“There’s definitely a lot more people who are waiting until September before they list properties and they’re trying not to list in August, if they don’t have to,” said Davelle Morrison, a Toronto broker with Bosley Real Estate Ltd.
As a result, new listings in July totalled 73,436, down six per cent from last July and on a seasonally adjusted basis, down five per cent from June.
When homes were flying off the market earlier this year, people could buy before they sold their own place and have little risk of their property not selling.
Now, Morrison is telling people to sell their place first because of how long properties are sitting.
She’s also telling her clients to “buckle up” if prices fall more and interest rates continue to rise.
The average sales price was $629,971, down five per cent from $662,924 last July and on a seasonally adjusted basis amounted to $650,760, a three per cent drop from June, CREA said.
Excluding the typically heated Greater Vancouver and Toronto Areas from the calculation cuts $104,000 from the national average price.
Kavcic feels the drops constitute a market correction that is playing out “almost everywhere, but to varying degrees.”
“Southwestern Ontario is feeling it hardest, with markets like Kitchener-Waterloo and London down roughly 15 per cent from their high already,” he said.
He’s noticed Vancouver prices have now fallen over four consecutive months and Montreal has been more immune to but is not escaping the downturn with drops in the last two months.
“We view Alberta as the market most able to weather this storm because it had already stagnated for a number of years before the pandemic, never saw the same froth as Ontario, and is now supported by near-$100 oil and population inflows from other regions,” Kavcic wrote.
“But, in a demonstration of the power of higher interest rates, even Edmonton and Calgary have been subject to a flattening (Calgary) or decline (Edmonton) in prices despite still-solid sales activity.”
This report by The Canadian Press was first published Aug. 15, 2022.
BC's Home Buyer Rescission Period: Your Questions Answered – British Columbia Real Estate Association – BCREA
The Home Buyer Rescission Period (HBPP), previously known as “Homebuyer Protection Period” and “cooling-off period,” is expected to be implemented province-wide in January 2023. With many details yet to be determined by the BC Government, we have been hearing from REALTORS® with questions. In this post we answer some of those questions.
Bookmark this page since we’ll be updating this post as we learn more details from the BC Government. In addition, if you are interested in subscribing to BCREA’s regular advocacy newsletter, please email [email protected].
What is the Home Buyer Rescission Period (HBRP)?
The HBRP, commonly known as a “rescission period,” gives buyers the right to withdraw from a purchase agreement within a specified period of time after an offer is accepted. Without a rescission period, if a buyer wishes to terminate a contract, they would need to negotiate with the seller and would typically face significant financial penalties or legal ramifications.
What properties will be subject to the HBRP?
The policy will apply to the following types of structures:
- detached homes,
- semi-detached homes,
- apartments in a duplex or other multi-unit dwelling,
- residential strata lots,
- manufactured homes that are affixed to land, and
- cooperative interests that include a right of use or occupation of a dwelling.
What are REALTORS®’ requirements to inform their clients?
All real estate licensees must provide general information on the HBRP to all consumers through a form approved by the Superintendent. Licensees must also provide an additional mandatory disclosure at the time of preparing an offer on behalf of a buyer and presenting an offer to a client, containing all of the following notices:
- the HBRP cannot be waived,
- the rescission period time length,
- the dollar amount of the rescission fee,
- the deposit handling, and
- HBRP exemptions.
Are brokerages required to retain a copy of a rescission notice?
Yes, brokerages must retain a copy of rescission notices that it prepares and is served to the seller or that the brokerage receives.
How are sellers supposed to receive rescission notice?
Buyers must serve rescission notice on the seller through one of the following methods: registered mail, fax, email with read receipt, and personal service. Rescission notices must contain:
- address, PID or description of the property,
- names and signature of the buyers,
- name of the seller(s), and
- date of notice.
What is meant by “three business days?”
For the HBRP, “business day” means a day other than a Saturday, Sunday or a statutory holiday. The rescission period is three business days, beginning the day after a contract is signed.
How much is the rescission fee?
Buyers who use their right to rescind will have to pay a fee of 0.25% of the purchase price. For a $1,000,000 home, this would result in a $2,500 fee paid to the seller.
How does a HBRP impact other subjects in my contract?
Other subjects are unaffected by the HBRP.
What about For Sale by Owner (FSBO) properties?
The HBRP applies to all residential real estate sales, which includes FSBO.
Can the HBRP be waived?
The HBRP cannot be waived.
Are there any exemptions?
. There are narrow exemptions, including:
- sales of residential real property located on leased land,
- sales of leasehold interest in residential real estate,
- sales at auction,
- sales by way of an Assignment of Contract,
- pre-construction sales of multi-unit development properties, which are already subject to a seven-day rescission period, and
- sales under a court order or supervision of a court.
Will the termination fee be taken from the deposit?
If a deposit is held in trust, brokerages must release the rescission fee to the seller upon rescission. The balance, if any, is returned to the buyer, despite what may be provided in the contract.
Who will receive the termination fee?
The rescission fee amount is provided to the seller.
How can I learn more about the HBRP’s details when they are available?
This blog post will be updated as we learn more about the HBRP from BCFSA and the Ministry of Finance. In addition, you can follow BCREA’s advocacy news, which will include updates on the HPRP, by subscribing to our Advocacy Update. To do so, please email [email protected].
What are the next steps for BCREA?
BCREA staff are updating and creating new Standard Forms and updating professional development courses to ensure REALTORS® are equipped with the tools needed to serve effectively clients. Staff are also meeting regularly with BCFSA to try and answer outstanding questions.
Will the Ministry of Finance implement additional consumer protection measures?
In May, BC’s real estate regulator, the BC Financial Services Authority, published an independent report, “Enhancing Consumer Protection in BC’s Real Estate Market,” which offered advice and recommendations to the Ministry of Finance to improve consumer protection. There was significant overlap between BCFSA’s advice and BCREA’s “A Better Way Home” paper.
The Ministry of Finance has not indicated whether they will implement additional consumer protection measures within the coming months.
What policies do BCREA recommend to improve consumer protection?
Earlier this year, BCREA has published a white paper, “A Better Way Home,” which included more than thirty recommendations to improve consumer protection. BCREA does not support a HBRP, because it is not likely to have a meaningful impact on consumer protection and may have unintended consequences on affordability.
If you have any additional questions, we encourage you reach out and share them at [email protected].
Below are a list of other resources on the HBRP:
To subscribe to receive BCREA publications such as this one, or to update your email address or current subscriptions, click here.
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