Selling prices declined from the early year peak as market conditions became more balanced and homebuyers have sought to mitigate the impact of higher borrowing costs. With that being said, the marked downward price trend experienced in the spring has come to an end. Selling prices have flatlined alongside average monthly mortgage payments since the summer.
Ontario - Selling Prices Declined As Market Conditions Became Balanced
Toronto, 05 December 2022 -- Homeownership market activity in November continued to be influenced by the impact of higher borrowing costs on affordability. Sales were down markedly compared to the same period last year, following the trend that unfolded since the commencement of interest rate hikes in the spring. New listings were also down substantially from last year, and at a very low level historically. The fact that the supply of homes for sale has remained low, has supported average selling prices at the $1.08 to $1.09 million mark since August.
Greater Toronto Area (GTA) REALTORS® reported 4,544 sales through TRREB’s MLS® System in November 2022 – down 49% compared to November 2021, but remaining at a similar level to October especially after considering the recurring seasonal downward trend in the fall. New listings, at 8,880, were down on both a year-over-year basis and month-over-month basis.
“Increased borrowing costs represent a short-term shock to the housing market. Over the medium- to long-term, the demand for ownership housing will pick up strongly. This is because a huge share of record immigration will be pointed at the GTA and the Greater Golden Horseshoe (GGH) in the coming years, and all of these people will require a place to live, with the majority looking to buy. The long-term problem for policymakers will not be inflation and borrowing costs, but rather ensuring we have enough housing to accommodate population growth,” said TRREB President Kevin Crigger.
“We have seen a lot of progress this year on the housing supply and related governance files such as the More Homes Built Faster Act. This is obviously good news. However, we need these new policies to turn into results over the next year. Otherwise, the current market lull will soon be behind us, population growth will be accelerating, and we will have done nothing to account for our growing housing needs. The result would be enhanced unaffordability and reduced economic competitiveness,” said TRREB CEO John DiMichele.
The MLS® Home Price Index Composite Benchmark was down by 5.5% year-over-year in November 2022. The average selling price for all home types combined was down by 7.2% year-over-year. Annual price declines continued to be greater for more expensive market segments, including detached and semi-detached houses.
“Selling prices declined from the early year peak as market conditions became more balanced and homebuyers have sought to mitigate the impact of higher borrowing costs. With that being said, the marked downward price trend experienced in the spring has come to an end. Selling prices have flatlined alongside average monthly mortgage payments since the summer,” said TRREB Chief Market Analyst Jason Mercer.
Ottawa - November Residential Resales: Expectedly Low
December 6, 2022 -- Members of the Ottawa Real Estate Board (OREB) sold 846 residential properties in November through the Board’s Multiple Listing Service® (MLS®) System, compared with 1,456 in November 2021, a decrease of 42%. November’s sales included 658 in the residential-property class, down 39% from a year ago, and 188 in the condominium-property category, a decrease of 50% from November 2021. The five-year average for total unit sales in November is 1,270.
“November’s sales were expectedly low given the typical slowdown this time of year but they also reflect today’s economic conditions,” says Penny Torontow, OREB’s 2022 President. “This is not isolated to our local market. Globally, we’re still adjusting to the post-pandemic world and that affects demand, pricing, interest rates, cost of living, supply chain disruptions and more. As a result, those who can, are waiting and watching.”
By the Numbers – Average Prices*:
The average sale price for a condominium-class property in November was $415,533, a decrease of 4% from 2021.
The average sale price for a residential-class property was $680,031, decreasing 5% from a year ago.
With year-to-date average sale prices at $774,422 for residential units and $454,436 for condominiums, these values represent an 8% increase over 2021 for both property classes.
“What’s concerning about the current market is the impact on first-time homebuyers,” says Torontow. “The marked decrease in condo sales, for example, signals that even entry-level properties are being affected. Fluctuating markets, paired with the stress test, are keeping first-time buyers on the sidelines in a tight rental market—with MLS® rentals increasing 27% this year over last.”
By the Numbers – Inventory & New Listings:
Months of Inventory for the residential-class properties has increased to 3.5 months from 0.9 months in 2021.
Months of Inventory for condominium-class properties has increased to 3.4 months from 1.1 months in 2021.
November’s new listings (1,598) were 12% higher than 2021 (1,429) and down 22% from October 2022 (2,046). The 5-year average for new listings in November is 1,398.
“With nearly four months of inventory and an average 30 days on market, Ottawa now has a balanced resale market, slightly tipping toward the buyers,” says Torontow. “Sellers are well-advised to work with a REALTOR® who has hyper-local knowledge about specific neighbourhoods, appropriate price points and ideal timing. Prices are adjusting but real estate is a long-term investment. It’s the same reason I tell buyers to marry the house and date the rate.”
Home sales and listing activity continue trending below long-term averages in November
Alberta - 2022 On Track To Be a Record Year For Sales
City of Calgary, Dec. 1, 2022 – Residential sales in the city slowed to 1,648 units, a year-over-year decline of 22%, but 12% above the 10-year average.
The pullback in sales over the past six months was not enough to erase gains from earlier in the year as year-to-date sales remain nearly 10% above last year’s record high. The year-to-date sales growth has been driven by a surge in both apartment condominium and row sales.
“Easing sales have been driven mostly by declines in the detached sector of the market,” said CREB® Chief Economist Ann-Marie Lurie. “Higher lending rates are impacting purchasers buying power and limited supply choice in the lower price ranges of the detached market is likely causing many purchasers to place buying decisions on hold.”
A decline in sales was met with a pullback in new listings and inventories fell to the lowest level reported in November since 2005. The pullback in both sales and new listings kept the months of supply relatively tight at below two months. The tightest conditions are occurring in the lower-price ranges as supply growth has mostly been driven by gains in the upper-end of the market.
Despite the lower supply levels, prices have trended down from the peak reached in May of this year. Even with the adjustments that have occurred, November benchmark prices continue to remain nearly nine% higher than levels reported last year.
Detached
Detached sales slowed across every price range this month, contributing to the year-over-year decline of nearly 34% and the year-to-date decline of five%. On a year-to-date basis, sales have eased for homes priced under $500,000 as the level of new listings in this price range has dropped by over 36% limiting the options for purchasers looking for affordable products.
Meanwhile, new listings and supply selection did improve for higher-priced properties creating more balanced conditions in the upper-end of the market. This has different implications for price pressure in the market.
The benchmark price in November slowed to $619,700, down from the high in May of $648,500. While prices have eased over the past several months, they continue to remain nearly 11% higher than levels reported last year.
Semi-Detached
The pullback in sales this month was enough to cause the year-to-date sales to ease by nearly one% compared to last year. Despite the recent declines, year-to-date sales remain 37% above long-term averages for the city.
Easing sales this month were also met with a pullback in new listings, causing further declines in inventory levels and ensuring market conditions remained relatively tight with a month of supply of 2 months and a sales-to-new-listings ratio of 100%.
Unlike the detached sector, the tight conditions prevented any further retraction in prices this month. In November, the benchmark price reached $562,800, slightly higher than last month and nearly 10% higher than last year’s levels.
Row
Further declines in new listings likely contributed to the slower sales activity this month as the sales-to-new-listings ratio remained high at 99%. Inventory levels fell to 383 units, making it the lowest level of November inventory recorded since the 2013. This low level of inventory ensured that the months of supply remained below two months.
Despite the persistently tight market conditions, prices trended down this month reaching $358,700. While prices have eased from the June high, they are nearly 14% higher than prices reported last November. The strongest price growth was reported in the North East, North and South East districts where prices have risen by over 18%.
Apartment Condominium|
Despite a pullback in new listings this month, apartment condominium sales continued to rise, and inventories fell to the lowest November levels seen since 2013. This caused further tightening in market conditions as the sales-to-new-listings ratio pushed above 100% and a month of supply dropped to two months.
Recent tightening in the market has put a pause on price adjustments for apartment condominiums. In November, prices remained relatively stable at $277,000 compared to last month. While prices have reported a year-over-year gain of nearly 10%, prices are still below their previous highs set back in 2014.
REGIONAL MARKET FACTS
Airdrie -November sales eased mostly due to the significant pullback in detached sales. While sales this month are down over last year’s record levels, overall activity is still far stronger than long-term trends and year-to-date sales are still on pace to reach a new record high.
New listings did improve over the previous year, thanks to gains in row, semi, and apartment-style products. While the growth in new listings did cause November inventories to rise over last year’s low levels, inventory levels remain nearly 40% below long-term trends in the area.
Despite persistently tight conditions, benchmark prices continue to trend down from the record high level reported in April of this year. Despite some adjustments, prices remained over 13% higher than last year’s levels.
Cochrane - Further declines in November sales contributed to the six% year-to-date decline in sales. However, with 1,091 sales so far this year, this is still 69% above long-term trends for the town.
Meanwhile, new listings have remained relatively low compared to sales, preventing a more significant shift in inventory levels. In November, inventory levels did rise above the low levels seen last year, but remained 35% below longer-term trends for the area.
Following significant gains reported earlier in the year, benchmark prices continue to trend down in November. However, the adjustments did not erase previous gains as the benchmark price remained over 12% higher than the levels reported last year.
Okotoks - Both sales and new listings eased in November preventing any significant change to inventory levels. While inventory levels are higher than last year, they remain 54% below long-term trends for the area. Overall year-to-date sales activity has improved over last year and is 41% higher than long-term trends.
As conditions have remained relatively tight this month, we saw a reversal of some of the price adjustments recorded over the previous two months. The benchmark price in November reached $549,100, a two% gain compared to last month, and a year-over-year gain of nearly 16%.
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