Toronto Real Estate Sales Lead Canada For Growth, BC Leads The Declines

by Better Dwelling

August 16, 2018

Canadian real estate sales continue fall to new lows. Canadian Real Estate Association (CREA) numbers show only 3 markets with more than 500 sales had year over year growth. Those that did see growth, only saw mild growth compared to previous years. The exception is Toronto, but that isn’t what it appears to be either. We’ll get to that in a minute.

Canadian Real Estate Sales Fall Nearly 2%

Real estate sales continue to fall across Canada. CREA reported 38,612 in July when seasonally adjusted, a 4.22% decline from last year. Unadjust, a.k.a. actual sales came in at 41,872 sales, down 1.71% from last year. Both numbers make this the worst July for real estate sales since 2012.

Canadian Real Estate Sales

The unadjusted sales of all types of homes, as reported through the Canadian MLS.

Source: CREA, Better Dwelling.

Toronto Is The Fastest Growing Real Estate Market… Kind of

Only 3 real estate markets with more than 500 sales showed positive growth, so that puts them in the lead. Toronto recorded 6,961 sales in July, up 17.56% compared to last year. Ottawa saw 1,621 sales, up 5.06 from last year. Montreal saw 3,201 sales, up just 1.07%. Toronto seems to be moving much higher, but a little historical context helps.

Canadian Real Estate Sales By Market

Canadian real estate sales in markets with more than 500 sales.

Source: CREA, Better Dwelling.

Last July, Toronto printed one of the worst Julys in the market’s history, due to policy changes in Ontario. Buyers say on the sidelines, waiting for the impact to be felt from these changes. This created a few months of unnaturally low sales data, than would occur in a normal market. That makes year over year growth appear huge, and it is, but it’s less important in context. This is still the second worst July for Toronto in nearly two decades.

The Largest Declines In Real Estate Sales Are In BC

The markets with the fastest falling sales in July were all located in British Columbia. Fraser Valley reported 1,230 sales in July, a decline of 33.94% – making it the worst in the country. Vancouver reported 2,108 sales, a decline of 30.01%. Victoria reported 609 sales, a decline of 19.02%. The province has seen prices soar in each one of these markets, which may have led to a FOMO pop in sales. Now sales numbers across BC are slowly coming back to reality.

Canadian Real Estate Sales By Market – July 2018

The percent change in Canadian real estate sales, in markets with more than 500 sales.

Source: CREA, Better Dwelling.

Canadian real estate sales declining across the country show local factors are secondary. Higher interest rates and tighter mortgage lending is starting to hit consumers. Combine that with home prices near record highs, and it’s pretty easy to understand the decline in sales.