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We have just released our latest monthly housing market update entitled “Toronto gain drove resales higher in Canada in July".
Highlights of the report:
The Greater Toronto Area was the main housing story in Canada in July. It posted a solid 7.7% monthly resales gain and accounted for more than two-thirds of the 1.9% increase recorded at the national level. Activity was flat in Vancouver and Montreal. The March increase may be an early sign that the initial effect of the new stress test is beginning to fade though not everywhere in Canada at this stage.
The GTA stood out in July thanks in part to more homes put up for sale. This wasn’t the case in the majority of markets across the country, though. New listings fell markedly in Vancouver, Calgary and Edmonton, and to a lesser extent in Ottawa and Montreal. New listings dropped by 1.2% nationally.
The national benchmark price appreciated at a faster rate (2.1% y/y) for the first time in 15 months. This primarily reflected a substantial easing in the pace of decline in the GTA—where prices are now close to flat year-over-year.
We see little risk that prices will accelerate much further in the near term. Except in a few areas (including Ottawa and Montreal where sellers have a slight upper hand), demand-supply conditions are balanced in the majority of markets in Canada, which does not support rapid price growth. Vancouver prices are in fact decelerating at present.
While potential sellers might still be dragging their feet at this point, we believe that Canada’s housing market is making progress at adjusting to the new stress test. We expect resales to recover further and more broadly on a regional basis over the second half of this year. This recovery will be only partial, however. The stress test has pushed some buyers out the market and rising interest rates will exert a substantial restraining effect.
Link to the full report
To view, print and download the new report, click on the following link:
http://www.rbc.com/economics/economic-reports/pdf/canadian-housing/housespecial-aug18.pdf
Highlights of the report:
The Greater Toronto Area was the main housing story in Canada in July. It posted a solid 7.7% monthly resales gain and accounted for more than two-thirds of the 1.9% increase recorded at the national level. Activity was flat in Vancouver and Montreal. The March increase may be an early sign that the initial effect of the new stress test is beginning to fade though not everywhere in Canada at this stage.
The GTA stood out in July thanks in part to more homes put up for sale. This wasn’t the case in the majority of markets across the country, though. New listings fell markedly in Vancouver, Calgary and Edmonton, and to a lesser extent in Ottawa and Montreal. New listings dropped by 1.2% nationally.
The national benchmark price appreciated at a faster rate (2.1% y/y) for the first time in 15 months. This primarily reflected a substantial easing in the pace of decline in the GTA—where prices are now close to flat year-over-year.
We see little risk that prices will accelerate much further in the near term. Except in a few areas (including Ottawa and Montreal where sellers have a slight upper hand), demand-supply conditions are balanced in the majority of markets in Canada, which does not support rapid price growth. Vancouver prices are in fact decelerating at present.
While potential sellers might still be dragging their feet at this point, we believe that Canada’s housing market is making progress at adjusting to the new stress test. We expect resales to recover further and more broadly on a regional basis over the second half of this year. This recovery will be only partial, however. The stress test has pushed some buyers out the market and rising interest rates will exert a substantial restraining effect.
Link to the full report
To view, print and download the new report, click on the following link:
http://www.rbc.com/economics/economic-reports/pdf/canadian-housing/housespecial-aug18.pdf