Canadian Existing Home Sales (March 2018)

Michael Dolega, Director & Senior Economist | 416-983-0500

Date Published: April 13, 2018

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Less expensive markets step-up as B.C. pulls back

  • Existing home sales inched up 1.3% in March, ending a two month streak of sharp declines. Activity was supported by a strong rebound in markets such as Montreal (5.1%) and Ottawa (22.1%). On the other hand, home sales in the GVA fell sharply (-8.6%) while GTA activity was little changed (2.1%) after revisions to previous months.
  • New listings also rose slightly, up 3.3% on the month, largely following the trends in activity.
  • The larger rise in listings has left the sales-to-listings ratio slightly lower at 53.0 (down from 54.0 in February 2018). Most provinces saw declines, with central Canada bucking the trend. The ratio in Saskatchewan (down 6.0 to 35.2) and Newfoundland & Labrador (down 2.9 to 29.9) has fallen to a decade and two-decade lows, respectively.
  • The lower sales-to-listings ratio, as well as the falling share of activity in the most expensive GVA (down 2.1%) and GTA (up 0.8%) markets has led the average home price lower by 1.9% in March – the third consecutive decline.
  • Abstaining from changes in composition, the HPI was up slightly (+0.3%) in March, and is up a mere 4.6% y/y, its slowest pace in nearly five years.

Key Implications

  • It was all about secondary markets this month, with Montreal and Ottawa stepping up to fill the void left by large pull-backs in high-priced markets in B.C. and lukewarm activity in Ontario.
  • The GTA and GVA markets are particularly under pressure from the ongoing uncertainty stemming from regulatory changes at multiple levels of government intended to cool these markets. While we expect the worst is behind the GTA, and the market should increasingly hold its own – something that's apparent in the current data release – the same cannot be said of the GVA/Lower Mainland markets in B.C. which still have to contend with impacts of the recently introduced Homes for B.C. 30-point plan. Still, we expect this market to begin stabilizing towards the end of the year, or in early-2019.
  • Canadian housing markets are likely to remain under-pressure from the recent B-20 regulation, higher mortgage rates, and in some cases provincial regulation. However, lower-priced markets where affordability is good should generally outperform in the current environment.

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