Toronto condos drop to 28-month low, Vancouver house prices -4% from peak in 2022 but condos near high. Calgary houses set new highs.
By Wolf Richter for WOLF STREET.
House prices in Canada were unchanged in February compared to January, seasonally adjusted, having fallen by 15.6% from the peak in February 2022, according to the Home Price Benchmark Index for single family houses by the Canadian Real Estate Association (CREA) today. Compared to a year ago, it ticked up 1.6%.
In dollar terms, the Benchmark Index for single-family houses has fallen by $145,500 from the peak in February 2022, to $788,800, just above where it had first been in August 2021 (all amounts in Canadian dollars). But there was a wide divergence between the major markets, and between houses and condos in some markets. And we’ll get to them.
Home sales dipped 3.1% in February from January, seasonally adjusted. Compared to the collapsed levels in February a year ago, they rose by 19.7%, but were still 5% lower than the 10-year average for February.
New listings ticked up 1.6% in February from January, even as sales fell 3.1%. And supply ticked up to 3.8 months of sales.
The Bank of Canada has tightened policy to deal with inflation. In July 2023, it hiked its overnight rate to 5.0% and has been in no rush to cut. For part of last year, it looked like inflation had been sort of vanquished, and rate-cut bets became all the rage. But late last year, inflation served up some nasty surprises – driven by housing costs, including a massive spike in the rent CPI.
The five-year government bond yield, which is crucial for Canadian mortgages, and which had dropped to 3.17% by the end of December, has since then risen to 3.67%.
Under its QT program, the BoC has so far shed 46% of its securities at the peak. This amounts to having shed 59% of the securities it had added during its pandemic QE.
Home Prices by Market.
Greater Toronto Area, single-family houses: The MLS Home Price Benchmark Index for single-family houses rose 1.1% in February from January, to $1,302,000 seasonally adjusted.
Compared to the peak in February 2022, the index is down by 16.4%, or by $255,000, and is just above where it had first been in September 2021. Compared to February 2023, the index is up 2.1%.
Greater Toronto Area, Condos: Prices fell 0.8% in February from January, to $681,700, down by 0.8% from February 2023, and down by 12.7% from the peak in February 2022, and the lowest since October 2021:
Hamilton-Burlington metro (part of the “Greater Toronto and Hamilton Area”): The single-family benchmark price rose by 0.9% in February from January, to $882,700 seasonally adjusted.
- From peak in February 2022: -21.9% or -$247,600
- Year-over-year: +0.9%
Hamilton-Burlington metro condos:
- Month-to-month: -2.1%
- From peak in April 2022: -15.8%
- Year-over-year: +0.7%
Greater Vancouver single-family: The benchmark price for single-family houses dipped 0.1% for the month, to $1,986,700 seasonally adjusted:
- From peak in April 2022: -4.2% or -$76,900
- Year-over-year: +7.5%
Greater Vancouver condos:
- Month-to-month: +1.2%%
- Year-over-year: +5.8%
Victoria: The single-family benchmark price fell by 1.1% for the month to $1,125,100 seasonally adjusted:
- From peak in April 2022: -11.2% or -$142,200
- Year-over-year: +0.7%
Ottawa: The benchmark price of single-family houses fell by 1.2% for the month, to $708,800, below where they’d first been in March 2021:
- From peak in March 2022: -11.5% or -$91,900
- Year-over-year: +3.7%.
Calgary: The single-family benchmark price rose by 0.7% for the month to a new high of $658,900 and was up 12.2% year-over-year:
Montreal: The single-family benchmark price edged up 0.2% for the month to $604,700 seasonally adjusted.
- From peak in May 2022: -5.0% or -$31,900
- Year-over-year: +3.4%.
Halifax-Dartmouth: The single-family benchmark price rose 0.5%, to $538,200; in essence unchanged for the past four months.
- From peak in April 2022: -4.2% or -$19,200
- Year-over-year: +5.3%.
Quebec City Area: The single-family benchmark price jumped 2.9% for the month, to $395,000, after having dropped by 3.9% in the prior month. It was up by 6.9% year-over-year:
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Increases in Ireland’s house prices have vastly outstripped any rise in wages seen over the past 10 years, according to Government statistics.
Two new reports by the Parliamentary Budget Office, the Oireachtas’ independent economic analysis arm, shows that average house prices doubled from €153,000 to €305,000 between 2013 and 2022.
However, at the same time, the median salary of a single person increased by 26% from €33,000 to €41,800, while the income of couples increased from €66,100 to €83,600.
The median is the middle figure in a row of numbers sorted from top to bottom, as opposed to the average.
The jump in median house prices of €25,000 in 2022 was the largest since 2017.
The worst ratio of cost to income seen anywhere in Ireland at the end of 2022 for couples was in the Dún Laoghaire-Rathdown local authority area, which has consistently seen the highest prices versus income level, with a ratio of 6.8:1. The lowest were in Leitrim, Roscommon, and Longford at 2.1:1.
Separately, the Parliamentary Budget Office noted that counties with the lowest number of new home completions per 1,000 population had the highest percentage increase in house prices.
Tipperary and Longford both saw annual property price increases of 8%, compared with new dwelling completions of just 3 and 2.6 completed dwellings per 1,000 people, respectively.
Cork city and Cork county were on the lower end of the inflationary scale, with the city showing property price hikes of 3% versus dwelling completions per 1,000 people of 4.6, while Cork county showed 1% and 5.6 for the same metrics, respectively.
Wicklow, meanwhile, was the county scoring best on the
Parliamentary Budget Office’s evaluation scale, the only county to show a reduction in property prices of 2% for 2023 along with one of the higher dwelling completion rates of 9.1 units finished per 1,000 people.
PropTrack’s home values index shows that Brisbane dwelling values have increased by 61% since the beginning of the pandemic, dwarfing the 33% increase across Sydney and the 16% rise across Melbourne:
PropTrack also showed that Brisbane’s median dwelling value was equal to Melbourne’s at $797,000 in February.
Admittedly, Brisbane has a higher share of detached houses than Melbourne. detached houses are more expensive that units and, therefore, pull Brisbane’s median dwelling value upwards.
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This fact is evidenced in the below table from PropTrack showing that Brisbane’s median house price was $892,000 in February, below Melbourne’s median house price of $909,000:
Nevertheless, Brisbane’s median house price was on the cusp of surpassing Melbourne’s at the end of February.
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Indeed, CoreLogic’s daily dwelling values index shows that Brisbane dwelling values grew by 0.9% in the 28 days to 18 March, well above the 0.2% growth recorded across Melbourne and the 0.4% growth recorded in Sydney:
“Brisbane is chasing down Melbourne and there is real potential that Brisbane will surpass Melbourne quite soon as Brisbane has maintained that demand supply imbalance that has fuelled price growth”, PropTrack’s Eleanor Creagh said.
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“Brisbane is the new Melbourne”, Brisbane buyer’s agent Wendy Russell said.
“And I believe Brisbane home values will surpass Melbourne by the end of the year, if not sooner”.
Recent forecasts from two of Australia’s banks tipped further strong price growth for 2024.
ANZ forecast 9-10% growth for Brisbane this calendar year, well ahead of only 2-3% growth for Melbourne:
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NAB forecast 7.7% price growth for Brisbane this year versus only 2.6% growth for Melbourne:
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Brisbane has almost lost its affordability advantage over Melbourne and is fast catching up with Sydney.
At some point in the not-too-distant future, it may come time to declare Brisbane housing a ‘bubble’ reminiscent of Perth a decade ago.
Ontario home prices stabilized in February, ending a five-month fall that began last summer, according to new numbers released by the Canadian Real Estate Association
Ontario home prices stabilized in February, ending a five-month fall that began last summer, figures released by the Canadian Real Estate Association Monday show.
On a year-over-year basis, the average single-family home in the province sold for $947,000 in February, up 2.5 per cent from the average of $923,800 they sold for in February of 2023.
The numbers are seasonally adjusted and do not take inflation into account.
Inflation, depending on what measure you choose, is running at between 3.4 and 3.7 per cent.
“It’s looking like February may end up being the last relatively uneventful month of the year as far as the 2024 housing story goes,” CREA senior economist Shaun Cathcart said in a news release.
“With so much demand having piled up on the sidelines, the story will likely be less about the exact timing of interest rate cuts and more about how many homes come up for sale this year.”
The Waterloo Region Association of Realtors says home sales were sluggish in February with only 485 homes sold through the Multiple Listing Service, representing an increase of 9.7 per cent compared to the previous year and a decline of 19.0 per cent compared to the previous 10-year average for the month.
The average price of a detached home in Kitchener, Waterloo and Cambridge was $889,280.
This represents a 0.5 per cent increase from February 2023 and a decrease of 2.2 per cent compared to January 2024.
The average sale price for all residential properties in Waterloo Region was $755,934.
Townhouses went for an average $629,734, representing a 2.2 per cent decrease from February 2023 and a decrease of 1.8 per cent compared to January 2024.
The average sale price for an apartment-style condominium was $459,455. This represents an increase of 0.2 per cent from February 2023 and an increase of 3.1 per cent compared to January 2024.
The average sale price for a semi was $673,638. This represents an increase of 1.0 per cent compared to February 2023 and an increase of 4.2 per cent compared to January 2024.
On a provincewide basis, prices for condos in a year-over-year comparison were essentially unchanged, at a .02 per cent decrease, and townhouses were up 2.5 per cent, similar to single-family houses.
“After two years of mostly quiet resale housing activity there’s a feeling that things are about to pick up,” said CREA chair Larry Cerqua.
On a national level, the number of transactions came in 19.7% above February 2023, but CREA cautioned that sales in that month were exceptionally low.
Within Ontario, sales in the north continued to show much stronger growth than those elsewhere in the province – single-family homes in the Soo were up 8.8 per cent year-over-year, and those in Sudbury were up 15.5 per cent.
Locally in Cambridge in February, single-family house prices were up 1.8 per cent, condos were down 1.4 per cent, and townhouses were up 2.7 per cent compared to February of 2023, using seasonally adjusted numbers unadjusted for inflation.
Use the interactive below to explore your region.
Home builders are stepping back from cuts in prices as a way to attract buyers, buoyed by confidence that declining mortgage rates will boost the housing market, according to the National Association of Home Builders (NAHB)/Wells Fargo Housing Market Index (HMI).
For the fourth month in a row, builder confidence went up and at 51 in March was the highest level since July 2023. Part of the reason that they are feeling bullish about the housing market is due to an increase in demand.
“Buyer demand remains brisk and we expect more consumers to jump off the sidelines and into the marketplace if mortgage rates continue to fall later this year,” Carl Harris, NAHB chairman—and a home builder himself—from Wichita, Kansas, said in a statement.
Mortgage rates hit a peak of 8 percent in the fall of 2023, but have trended down towards the end of the year. And while they have ticked up again, last week Freddie Mac pointed out that the 30-year fixed rate had declined for another week to a little over 6.7 percent.
The NAHB suggested that falling rates and anticipation of further declines, as expectations that policymakers are set to bring down borrowing costs at some point in 2024, will spark more activity in the market.
“With the Federal Reserve expected to announce future rate cuts in the second half of 2024, lower financing costs will draw many prospective buyers into the market,” NAHB chief economist Robert Dietz said in a statement.
The anticipation of more buyers ready to explore opportunities to own homes has made builders pull back on slashing prices, a strategy they deployed in the past to spark sales.
In March, about 24 percent of builders said they reduced prices, the lowest number seen since July 2023, and down from 36 percent from December. But builders are still using this tactic to attract buyers, the NAHB said, with the average staying at 6 percent in March for the ninth consecutive month.
But builders were not without challenges. They are struggling to secure land to construct new homes, find enough workers and grappling with higher costs in the sector.
“Even though there is strong pent-up demand, builders continue to face several supply-side challenges, including a scarcity of buildable lots and skilled labor, and new restrictive codes that continue to increase the cost of building homes,” Harris said.
More demand for building, may contribute to a jump in prices for key products.
“As home building activity picks up, builders will likely grapple with rising material prices, particularly for lumber,” Dietz said.
Uncommon Knowledge
Newsweek is committed to challenging conventional wisdom and finding connections in the search for common ground.
Newsweek is committed to challenging conventional wisdom and finding connections in the search for common ground.
Canadian home prices were flat in February after falling for five straight months, a potential sign that the country’s housing market may be rebounding after last year’s slump.
The national home price index, which excludes the highest priced properties, was $719,400 last month, which was the same as in January, according to the Canadian Real Estate Association or CREA.
The last time the home price index rose was from July to August last year, a month after the Bank of Canada shocked the market with back-to-back interest rate hikes. The surprise move had led to a slowdown in sales and a drop in home prices as many would-be homebuyers had a tougher time qualifying for a large enough mortgage to make a purchase.
But now that the central bank has kept its benchmark interest rate steady at 5 per cent for more than six months, would-be buyers are starting to gain confidence that borrowing costs will no longer continue to rise. Prospective buyers who delayed their purchases last year are starting to look again and make bids. The real estate industry said there is pent up demand after months of lacklustre activity.
“People are itching to get going,” said Samantha Villiard, regional vice president for RE/MAX real estate agency. “More people are slowly getting comfortable getting back into the market,” she said.
Realtors have reported an increase in showings and bids in areas that experienced heavy competition during the pandemic’s real estate boom. That includes the suburbs of Toronto and Chilliwack, inland of Vancouver. Over the past month, the home price index rose in Oakville, Milton, Hamilton and Burlington, as well as Chilliwack.
At the same time, the home price index continued to fall in other markets that overheated when interest rates were nearly zero. That includes some parts of Ontario’s cottage country and less populated cities like Guelph.
Across the country, home sales fell 3.1 per cent from January to February after removing seasonal influences. B.C. and Ontario, the country’s largest real estate markets, led the way down with homes sales declining 7 per cent month over month in both. That followed a flurry of sales in December and January. Last month’s volume of sales is still higher than in the fall when homebuyers were still adjusting to the higher interest rates.
TD economist Rishi Sondhi said that activity is still below pre-pandemic days due to lower sales in Ontario, B.C. and Quebec. “This suggests that significant pent-up demand remains in these markets,” he said in a research note.
New listings rose 1.6 per cent from January to February with more homeowners putting their properties up for sale in B.C. and Alberta.
Editor’s note: This article has been update to clarify that Chilliwack is located inland of Vancouver.
While home prices are rising across the country, Texas metro areas like San Antonio and Austin, once the poster child for the pandemic’s booming housing market, are still experiencing modest declines, according to the latest data from Zillow.
National home prices were up by 0.3 percent in February from a month earlier, and 4.2 percent higher year on year, but in San Antonio they were mostly unchanged between January and February, and they were down by 2.5 percent compared to a year before. In the former pandemic boomtown of Austin, home prices were up 0.3 percent in February month over month, but still down by 5.1 percent year over year.
The latest data, updated to February 29, show an even steeper drop compared to last year’s numbers. In San Antonio, the average value of a home was $253,762, down 2.8 percent. In Austin, it was $533,719, down 6.2 percent.
The drop in home prices was even more striking in these metro areas compared to their peak in 2022. From then, San Antonio home prices have tumbled by 7.5 percent, while in Austin they are down by a staggering 20.4 percent.
San Antonio, Austin and New Orleans, Louisiana, were the only metro areas out of a list of 50 of the U.S.’s largest metropolitan housing markets analyzed by Zillow where home prices went down in February. In New Orleans, prices fell 0.1 percent in February, month over month, and they were down by 7.5 percent year on year.
The three metro areas are still suffering the impact of a price correction that began in the U.S. in late summer 2022, when demand began to slide following the rise in mortgage rates due to the Federal Reserve’s aggressive rate-hiking campaign to control surging inflation. While this correction seemed to find an end in spring 2023 across the country, as pent-up demand and low inventory kept prices from plummeting, Austin and New Orleans in particular have continued seeing drops.
Home prices are currently declining across Texas as the state has built the highest number of new homes in the country, together with Florida. In the Lone Star State, the average home value was $298,624 as of February 29, according to Zillow, down 0.1 percent compared to a year before—though sales haven’t risen to match this decline, according to Texas REALTORS’ data.
“While rising inventory in most markets should offer buyers more options in 2024, fluctuations in mortgage rates continue to affect buyers’ decisions to invest in real estate. We’re hoping to see lower interest rates by the end of this year,” Jef Conn, chairman of Texas REALTORS, previously said in a statement to Newsweek.
“Higher mortgage rates deterred some buyers in 2023, but even so, the overall median price of homes in Texas saw only a slight decline, 1.4 percent, compared to 2022, with the majority of metro areas seeing slight median price increases. Real estate is very localized, so certain markets are experiencing very different trends than Texas as a whole is seeing. Realtors can help buyers make sense of the state of their specific market and guide them through the best decisions for their situation.”
While San Antonio and Austin showed significant drops from February 2023, other metro areas in Texas have seen prices going up. In Dallas, home prices climbed 0.5 percent in February, month over month, and 1.3 percent year on year. In Houston, they’ve gone up by 0.3 percent in the month and 1.2 percent year over year. Compared to their peak in 2022, prices in these metro areas were down, respectively, by 5.7 percent and 3.8 percent.
Uncommon Knowledge
Newsweek is committed to challenging conventional wisdom and finding connections in the search for common ground.
Newsweek is committed to challenging conventional wisdom and finding connections in the search for common ground.
The average price of newly marketed properties has risen by 1.5% (+£5,279) this month to £368,118, higher than the historic average March increase of 1.0% and the biggest for 10 months as the market continues its recovery after a muted 2023.
This is according to the latest data from the Rightmove HPI which suggests the positive start to the year continuing, paving the way for a greater number of home purchases than last year.
With average asking prices still £4,776 below the May 2023 peak, Rightmove says more are seeing a window of opportunity to buy.
The number of sales being agreed is now 13% higher than at this time last year. And buyer demand is now 8% above last year, led by the less mortgage-rate-sensitive larger homes sector and London.
However, Rightmove warns that despite a better-than-expected start to the year, the market remains sensitive to pricing and external events:
Rightmove’s real time data shows the growth in buyer demand was tempered somewhat by a lacklustre Spring Budget, with no direct help for first-time buyers or mortgage market innovations.
The average time to find a buyer is 71 days, the longest at this time of year since 2019. Attractively priced properties are quickly being cherry-picked, but over-optimistically priced sellers are taking longer to find a buyer.
Commenting on the latest Rightmove data Together head of intermediary sales James Briggs said: “With affordability concerns seeming to ease, buyers could be in a position to snap up bargains, as momentum in the market picks up.
“The ambition for homeownership is far from dwindling, with many younger buyers planning to step onto the housing ladder. From our own research, we know a fifth (20%) of first-time millennial buyers opted to move back in with their parents to expedite saving for a deposit”.
Briggs added: “An additional boost came with the chancellor announcing in the recent budget that the higher rate of capital gains tax on residential property sales will be cut by 4%, triggering sales from rental investors, and we could see a new wave of from those who have put off the option of exiting the rental market, opening up more family homes and spaces for first time buyers”.
Ask Partners CEO Daniel Austin said today’s data showed that the property sector was showing signs of recovery and the outlook has considerably improved.
“Rent values have seen sustained growth, positioning real estate as reasonably valued in comparison to gilts and presenting growth potential”.
He added: “In the realm of commercial real estate, factors like physical condition, location, and age significantly influence a property’s value. Well-maintained properties boasting modern amenities tend to command higher prices, while neglected ones may struggle to attract tenants or investors.
“In the current market, the emphasis has shifted towards the importance of location and quality over the yield on debt or cost. We anticipate opportunistic acquisitions of prime properties in prime locations”.
Saffron for Intermediaries national account manager Phil Lawford said: “After the first rise in average mortgage rates in six months between February and March, the increase in house prices announced today is a pleasant reminder of the positive sentiment that has returned to the market in 2024″.
He added: “There is no doubt that the market is on steadier ground than it has been for some time. In February, the Royal Institution of Chartered Surveyors reported that buyer demand was at its strongest in two years, and falling swap rates at the beginning of the year triggered a rates war as lenders tried to convert this demand into custom.
“While there is clearly much to be positive about, the role of the broker remains crucial in an environment where uncertainty and volatility hide beneath the surface. With rates creeping up (albeit after a flurry of cuts) and the average shelf-life of a mortgage product falling from 28 days to 15 days over the last month, we are not quite yet over the hump and both lenders and advisers will need to work hard to help borrowers find solutions that work for them.”
Average house prices in March increased by 1.5% or £5,279 to reach £368,118, according to Rightmove’s latest house price index.
This represents the largest monthly increase for 10 months, which Rightmove said signalled the continued recovery of the housing market after a muted 2023.
This 1.5% increase surpasses the typical average rise observed in March, which historically stands at 1%. Year-on-year house prices have increased by 0.8%.
Additionally, sales increased 13% compared to March last year, and buyer demand remains 8% higher than the previous year. Rightmove said the increase in buyer demand has been led by the largest homes sector and London, markets which are less sensitive to mortgage rate fluctuations.
Agreed sales of ‘top-of-the-ladder’ properties, which covers all five bed properties and above, as well as four bed detached houses, are 18% higher than last year.
>> See also: UK house prices near 2022 peak, rising for the fifth consecutive month
>> See also: House prices in January rise for fourth consecutive month, Halifax says
London has seen the biggest increase in buyer demand, both overall and for properties at the top end of the market, compared to this time last year.
With average asking prices still £4,776 below the peak observed in May 2023, Rightmove has said that potential buyers have identified ‘a window of opportunity’ to enter the market.
However, according to Rightmove, the lack of measures in the Spring Budget aimed at helping first-time buyers or the mortgage market has resulted in “an immediate pause in interest from some buyers”.
Tim Bannister, director of property science at Rightmove, said: “March is typically a strong month for asking price growth, as both buyer and seller activity levels rise and the spring selling season gets underway.
”However, the stronger than usual price growth this March indicates that new sellers are feeling much more confident, with some perhaps being over-optimistic, that there is enough buyer activity and affordability in their local market to achieve a higher price”.
Marc von Grundherr, director of estate agent Benham and Reeves, said: “While mortgage affordability remains an issue, it certainly hasn’t dampened the appetite of London buyers and we’ve continued to see a high level of activity at all price thresholds, but particularly across the super prime market.
”Buyers at the very top end of the ladder are acting with great confidence, with the higher cost of borrowing not presenting the same obstacle as the average homeowner. As a result, we’re seeing high demand for super-prime stock and many more buyers circling due to a more constrained supply of suitable properties in this sector”.