Major housing markets favouring buyers, if they can afford it

Sales are down, inventory is building but other provinces offer more affordability

Major housing markets favouring buyers, if they can afford it
Steve Randall

Homeowners in Vancouver and Toronto may find it harder to sell this summer as the market shifts in favour of homebuyers, assuming they can afford to stay in BC.

Greater Vancouver Realtors released sales data Wednesday showing a 19% drop in June compared to a year earlier with 2,418 sales through the MLS, almost 24% below the 10-year seasonal average. New listings were up 7% year-over-year and total listings of 14,182 represent a 42% increase from June 2023.

“The June data continued a trend we’ve been watching where buyers appear hesitant to transact in volumes we consider typical for this time of year, while sellers remain keen to bring their properties to market,” Andrew Lis, GVR’s director of economics and data analytics said. “This dynamic is bringing inventory levels up to a healthy range not seen since before the pandemic. This trend is providing buyers more selection to choose from and driving all market segments toward balanced conditions.”

Lis noted that a further interest rate cut, perhaps as soon as this month, would be an additional boost for homebuyers.

Home prices are yet to see a significant impact from rising inventory and easing sales. The latest MLS Home Price Index composite benchmark price for all residential properties in Metro Vancouver is currently $1,207,100, up 0.5% year-over-year but down 0.4% compared to May 2024.

“June’s lower-than-normal transaction volumes suggest many buyers remain hesitant, which has allowed inventory to accumulate and has kept a lid on upward price pressure across market segments,” added Lis. “With that said, the transaction-level data do show that well-priced properties are still selling quickly, suggesting astute buyers are able to spot value and act when opportunities arise.”

Meanwhile, the Toronto Regional Real Estate Board (TRREB) said Thursday that GTA home sales in June were down from a year earlier.

There were 6,213 home sales through TRREB’s MLS System last month, more than 16% lower than in June 2023. New listings were up 12% and the MLS Home Price Index Composite benchmark was down by 4.6% year-over-year. The average selling price of $1,162,167 was down by 1.6% from a year from a year earlier.

“The Bank of Canada’s rate cut last month provided some initial relief for homeowners and home buyers. However, the June sales result suggests that most home buyers will require multiple rate cuts before they move off the sidelines. This follows Ipsos polling for TRREB, which suggested that cumulative rate cuts of 100 basis points or more are required to boost home sales by any significant amount,” said TRREB President Jennifer Pearce.

While a quick increase in home prices in the GTA is unlikely given the elevated inventory, TRREB is expecting the long term demand to remain high versus supply amid strong migration to the region.

Seeking affordability elsewhere

While prices may not have surged, they are a challenge for many would-be buyers in the metro area, and British Columbia is one of two provinces where the number of people considering a move to another province is highest.

A new report from Angus Reid Institute found that 28% of Canadians are seriously considering leaving their current province due to the high cost of housing, rising to 36% among respondents in BC and 39% in Ontario. Those in Saskatchewan are least likely to say this.

Newcomers to Canada are more likely to say they are looking for affordability in another province along with 42% of those aged 18-24 and, specifically for BC respondents the under 35 age group is most likely to be thinking about leaving.

Worrying for the Canadian economy is the significant cohort who say they are considering leaving the country. Overall, 15% said they are considering the United States and 27% are thinking about somewhere else abroad.

Asked if there is another reason other than high cost of housing for considering a move, 76% of all respondents said there is not.

Most (53%) aged 18-24 are hopeful housing affordability will improve, but those aged 25-44 are divided between optimism and pessimism on the matter.

A separate survey from Royal LePage also highlighted the intention of many Canadians to seek more affordable housing in another city, although not necessarily another province.