The tightening of market conditions that unfolded in the spring is “unwinding rapidly” and Toronto is now the closest it has been to a so-called buyer’s market since last winter, a new report from RBC suggests.
The report, which was released last week, shows that home sales in Toronto were down 8.7 per cent in July compared to the previous month even as listings inched up by 7.8 per cent.
The average benchmark price in Toronto was still up 1.1 per cent month-over-month in July but RBC says that the pace of further price gains are likely to be restrained so long as interest rates remain high.
“The spring tightening in demand-supply conditions is unwinding rapidly in BC and Ontario. Softer sales and increasing new listings returned most markets in these provinces to balance, with Toronto the closest it’s been to a buyer’s market since January,” the report states. “We expect higher interest rates to keep curbing buyers’ enthusiasm for months to come, while possibly forcing the hand of some current owners to sell.”
RBC says that while price appreciation “remains generally brisk,” changes in market conditions have brought “overall demand-supply conditions in Canada back into balance after tightening surprisingly fast this spring.”
In fact, the bank says that a 24 per cent increase in listings that has occurred nationwide since April has now fully reversed the declines seen earlier this year.
Going forward, the bank anticipates that conditions in the real estate market will be “bumpy” but it is not calling for outright price declines at this time.
“We see this summer’s cooling as evidence the surprisingly strong rebound in the spring wasn’t sustainable. Our view had been—and remains—the recovery will be slow until interest rates are cut,” the report states. “What the spring rebound did, though, is bring forward the bottom of price cycle that we earlier anticipated around the fall. With prices rising sooner, the magnitude of the correction turned out to be smaller than expected. We think the resulting higher trough (in level terms) will restrain the pace of future price gains.”
The average selling price of a Toronto home across all property types peaked at $1,334,062 in February 2022 before dropping to a low of $1,037,542 amid what RBC previously called a “historic” housing correction brought about by the Bank of Canada’s aggressive interest rate hiking cycle.
The average selling price in July was $1,118,374, up about 4.2 per cent from one year prior.
OTTAWA – The Canadian Real Estate Association says the number of homes sold in August fell compared with a year ago as the market remained largely stuck in a holding pattern despite borrowing costs beginning to come down.
The association says the number of homes sold in August fell 2.1 per cent compared with the same month last year.
On a seasonally adjusted month-over-month basis, national home sales edged up 1.3 per cent from July.
CREA senior economist Shaun Cathcart says that with forecasts of lower interest rates throughout the rest of this year and into 2025, “it makes sense that prospective buyers might continue to hold off for improved affordability, especially since prices are still well behaved in most of the country.”
The national average sale price for August amounted to $649,100, a 0.1 per cent increase compared with a year earlier.
The number of newly listed properties was up 1.1 per cent month-over-month.
This report by The Canadian Press was first published Sept. 16, 2024.
MONTREAL – Two Quebec real estate brokers are facing fines and years-long suspensions for submitting bogus offers on homes to drive up prices during the COVID-19 pandemic.
Christine Girouard has been suspended for 14 years and her business partner, Jonathan Dauphinais-Fortin, has been suspended for nine years after Quebec’s authority of real estate brokerage found they used fake bids to get buyers to raise their offers.
Girouard is a well-known broker who previously starred on a Quebec reality show that follows top real estate agents in the province.
She is facing a fine of $50,000, while Dauphinais-Fortin has been fined $10,000.
The two brokers were suspended in May 2023 after La Presse published an article about their practices.
One buyer ended up paying $40,000 more than his initial offer in 2022 after Girouard and Dauphinais-Fortin concocted a second bid on the house he wanted to buy.
This report by The Canadian Press was first published Sept. 11, 2024.
MONTREAL – The Quebec Professional Association of Real Estate Brokers says Montreal-area home sales rose 9.3 per cent in August compared with the same month last year, with levels slightly higher than the historical average for this time of year.
The association says home sales in the region totalled 2,991 for the month, up from 2,737 in August 2023.
The median price for all housing types was up year-over-year, led by a six per cent increase for the price of a plex at $763,000 last month.
The median price for a single-family home rose 5.2 per cent to $590,000 and the median price for a condominium rose 4.4 per cent to $407,100.
QPAREB market analysis director Charles Brant says the strength of the Montreal resale market contrasts with declines in many other Canadian cities struggling with higher levels of household debt, lower savings and diminishing purchasing power.
Active listings for August jumped 18 per cent compared with a year earlier to 17,200, while new listings rose 1.7 per cent to 4,840.
This report by The Canadian Press was first published Sept. 6, 2024.
