{"id":9865,"date":"2018-07-21T10:10:05","date_gmt":"2018-07-21T17:10:05","guid":{"rendered":"http:\/\/www.roryc.ca\/blog\/?p=9865"},"modified":"2018-07-20T07:45:45","modified_gmt":"2018-07-20T14:45:45","slug":"reason-for-optimism-in-canadian-housing-market-as-buyer-competition-heats-up","status":"publish","type":"post","link":"https:\/\/www.roryc.ca\/blog\/2018\/07\/reason-for-optimism-in-canadian-housing-market-as-buyer-competition-heats-up\/","title":{"rendered":"Reason for Optimism in Canadian Housing Market as Buyer Competition Heats Up"},"content":{"rendered":"

A slight uptick in sales last month could be a sign of improved housing market stability, according to the Canadian Real Estate Association, as buyers have finally absorbed the impact from tougher mortgage qualification rules introduced at the beginning of the year.<\/p>\n

However, year-over-year performance continues to fall short, with a 10.7% decline in sales, and prices softening by 1.3% to an average of $496,000. That\u2019s a nine-year low and the fifth month in a row that home values have fallen, though by the smallest amount, CREA notes. The MLS Home Price Index rose just 0.9%, the 14th consecutive month of deceleration, and largely led by price declines in the Greater Golden Horseshoe.<\/p>\n

Reason for Optimism<\/strong><\/p>\n

Despite year-over-year declines, though, the 4.1% increase between May and June, reflects the \u201cfirst substantive month-over-month increase this year\u201d and could indicate demand is starting to recover, says CREA\u2019s President Barb Sukkau. \u201cThis year\u2019s new stress-test on mortgage applicants has been weighing on home sales activity; however, the increase in June suggests its impact may be starting to lift,\u201d she says.<\/p>\n

Adds Chief Economist Gregory Klump, \u201cThe national increase in June home sales suggests activity may indeed by starting to turn the corner,\u201d he says, though noting the rising interest rate environment will continue to be a barrier to home affordability.<\/p>\n

\u201cEven so, the number of homes trading hands has a long way to go before it returns to levels posted in recent years. Looking ahead, home sales activity and price gains will likely be held in check by higher interest rates.\u201d<\/p>\n

On Wednesday, July 11, the Bank of Canada hiked its trend-setting interest rate to 1.5%, prompting consumer lenders to increase their Prime variable borrowing rate to 3.7%. As well, fixed-rate pricing faces upward pressure from the resulting volatility in the bond market, pointing to an overall higher cost of borrowing for both new and renewing mortgage applicants.<\/p>\n

Buyer Competition Heats Up<\/strong><\/p>\n

The supply of new homes for sale declined 1.8%; combined with the small increase in June sales, that has tugged the market slightly toward sellers\u2019 conditions, with a national sales-to-new-listings ratio of 54.3%, up from 51.2% in May.<\/p>\n

This ratio, which is calculated by dividing the number of sales by the number of new listings over a specific time period in a region, sheds light on the level of competition in a given market. A ratio between 40% \u2013 60% indicates a balanced market, with below and above signalling buyers\u2019 and sellers\u2019 conditions, respectively.<\/p>\n

According to CREA, two thirds of all markets remain in balanced territory.<\/p>\n

The level of inventory \u2013 the number of months it would take to completely sell all of the available homes on the market \u2013 sat at 5.4 months in June, down from the 5.6 in May, which was a three-year high.<\/p>\n

Apartments continue to lead the market in terms of price growth, reflecting their status as one of the last remaining affordable points of entry for many buyers in Canada\u2019s largest markets, with values up 11.3%. That\u2019s followed by townhouse prices at 4.9%, hough this housing type is starting to see price deceleration.<\/p>\n

Single-family home values both declined, with one-storey homes down 1.8%, and two-story by 4.1%.<\/p>\n

June Home Sales and Prices Across Canada<\/strong><\/p>\n

Check out the infographic below to see how values have fared in Canada\u2019s largest markets in June :<\/p>\n

\u00a0\u00a0\u00a0\u00a0 \"\"<\/a><\/p>\n

CREA : June Home Sales Improve as Market \u201cTurns Corner\u201d<\/a> by Penelope Graham | zoocasa<\/p>\n","protected":false},"excerpt":{"rendered":"

A slight uptick in sales last month could be a sign of improved housing market stability, according to the Canadian Real Estate Association, as buyers have finally absorbed the impact … [read more<\/a>]<\/p>\n","protected":false},"author":3,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[8],"tags":[],"class_list":["post-9865","post","type-post","status-publish","format-standard","hentry","category-market-updates"],"yoast_head":"\nReason for Optimism in Canadian Housing Market as Buyer Competition Heats Up • Rory C Real Estate | Oakwyn Realty<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.roryc.ca\/blog\/2018\/07\/reason-for-optimism-in-canadian-housing-market-as-buyer-competition-heats-up\/\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" 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