Home sales rose sharply in Toronto and Vancouver last month as Canada’s most expensive cities continued to move strongly into recovery mode after a long slump.
Sales of all home types climbed by 22 per cent in the Greater Toronto Area in September compared with the same month last year, while average prices rose by 5.8 per cent. Much of the growth in activity came from a sharp rebound in sales of detached houses.
In Greater Vancouver, sales roared ahead by 46 per cent in September from a year earlier, but the growth came off of a low base of sales in 2018 as the Vancouver market was cooling rapidly. Last month’s sales were 1.7 per cent below the 10-year average for September, according to the Real Estate Board of Greater Vancouver.
“The real picture is that the level of sales activity is now effectively back to normal,” Bank of Montreal senior economist Robert Kavcic said in a research note. “Unless the broader economy rolls over, look for this market to firm up further as we move into the fall.”
In contrast to Toronto, the sales surge in Vancouver came after prices fell to their lowest level since the spring of 2017, drawing buyers back into the market.
The residential benchmark price for the Vancouver region decreased in September to $990,600, down 0.3 per cent from August and a 7.3-per-cent drop from a year earlier.
The benchmark figure, an industry representation of the typical home sold in Greater Vancouver, has declined 16 consecutive times on a month-over-month basis. It has fallen from a record high of $1.1-million in May, 2018.
Regionally, the benchmark price of detached homes sold fell to $1,406,200 last month, an 8.6-per-cent decrease compared with a year earlier. The benchmark price for condos slipped 6.5 per cent year over year to $651,500 while declining 7.2 per cent to $767,500 for townhouses.
“We’re seeing more balanced housing-market conditions over the last three months compared to what we saw at this time last year,” Vancouver board president Ashley Smith said in a statement.
There were 13,439 properties listed for sale last month in the Vancouver region, a 2.7-per-cent increase over September, 2018.
Toronto Real Estate Board president Michael Collins said the supply of listings in the GTA continues to be a concern. While sales soared last month, new listings fell by 1.9 per cent compared with September last year.
Mr. Collins said Toronto has seen multiple months this year where sales growth has outpaced the rate of new listings, which means the market is tightening and price growth is poised to accelerate.
September’s 5.8-per-cent increase in the average home sale price in the GTA was the largest increase on a year-over-year basis in any month since June, 2017.
In each month between May and August this year, average sale prices climbed by between 3 per cent and 3.6 per cent compared with the same period last year.
TREB said the average sale price for all types of homes hit $843,115 in the GTA last month, the highest average monthly sale price since May, 2017.
Sales growth was driven by a 29-per-cent increase in the number of detached houses sold last month, TREB said. The average detached house in the City of Toronto sold for $1.36-million last month, while the average detached house price in the 905 suburban region surrounding the City of Toronto hit $946,256.
Condominium sales climbed by 16 per cent in the GTA last month, while prices rose by 4.2 per cent to an average of $595,013.
In Greater Vancouver, the market appears to be in balanced territory.
A measurement closely watched by the housing industry known as the sales-to-active-listings ratio reached 17.4 per cent in Greater Vancouver last month. Real estate agents consider it a balanced market when the ratio ranges from 12 per cent to 20 per cent. It is deemed a buyer’s market below 12 per cent and a seller’s market above 20 per cent, if sustained over several months.
Janet McFarland
Brent Jang