Market watch - Sales and Average Selling Price Increases in October

We are seeing positive movement in the Canadian Real Estate market with sales increasing as consumer confidence is getting stronger, boosted by another consecutive Bank of Canada interest rate cut.

While we are still early in the Bank of Canada’s rate-cutting cycle, it does appear that an increasing number of buyers moved off the sidelines and back into the marketplace in October. The positive affordability picture brought about by lower borrowing costs and relatively flat home prices prompted this improvement in market activity.

Sales and Average Selling Price Increases in October

Toronto, November 6, 2024 -- Greater Toronto Area (GTA) home sales increased strongly year-over-year in October 2024. Over the same period, new listings were up, but at a lesser annual rate. The result was tighter market conditions compared to October 2023. The average selling price was up slightly on an annual basis.

“While we are still early in the Bank of Canada’s rate-cutting cycle, it definitely does appear that an increasing number of buyers moved off the sidelines and back into the marketplace in October. The positive affordability picture brought about by lower borrowing costs and relatively flat home prices, prompted this improvement in market activity,” said Toronto Regional Real Estate Board (TRREB) President Jennifer Pearce.

GTA REALTORS® reported 6,658 home sales through TRREB’s MLS® System in October 2024 – up by 44.4% compared to 4,611 sales reported in October 2023. New listings entered into the MLS® System amounted to 15,328 – up by 4.3% year-over-year. On a seasonally adjusted basis, October sales increased month-over-month compared to September.

The MLS® Home Price Index Composite benchmark was down by 3.3% year-over-year in October 2024. The average selling price was up by 1.1% compared to October 2023 to $1,135,215. On a seasonally adjusted basis, the average selling price edged up compared to September.

“Market conditions did tighten in October, but there is still a lot of inventory and therefore choice for home buyers. This choice will keep home price growth moderate over the next few months. However, as inventory is absorbed and home construction continues to lag population growth, selling price growth will accelerate, likely as we move through the spring of 2025,” said TRREB Chief Market Analyst Jason Mercer.

“Policymakers can further improve affordability by reducing taxes on home buyers. TRREB supports the Conservative Party of Canada pledge to remove the GST from the purchase of new homes sold for under $1 million as this is an encouraging step towards giving new home buyers desperately needed relief. Enhancing the rebate will not only make homes more affordable, but it will also increase the number of homes built,” said TRREB CEO John DiMichele. “Given that the average price of a home in less affordable markets such as the GTA and Vancouver is over $1 million, phasing out the rebate between $1 million and $1.5 million, rather than a hard cutoff at $1 million, would address this shortcoming. Provincial consideration should also be given to matching this proposal,” continued DiMichele.

Ottawa - Consumer Confidence Cautiously on the Rise in Ottawa Resale Market

Ottawa, November 6, 2024 -- The number of homes sold through the MLS® System of the Ottawa Real Estate Board (OREB) totaled 1,179 units in October 2024 — an increase over the 1,047 units sold last month.

Home sales were 3.9% below the five-year average and 0.9% below the 10-year average for the month of October.

On a year-to-date basis, home sales totaled 11,662 units in October 2024 — an increase of 9.4% from the same period in 2023.

“We’re seeing positive movement in Ottawa’s market with sales activity up,” says OREB President Curtis Fillier. “This is especially interesting because there has been sustained activity throughout the year instead of the typical seasonal spikes and lulls. Consumer confidence is getting stronger, boosted by another consecutive Bank of Canada interest rate cut — though many are waiting for additional rate drops.”

The 50-basis-point reduction might offer optimism following Ontario’s tabling of the Fall Economic Statement where housing starts projections were scaled back to 81,300, representing another reduction in projections and is even further from the province’s goal of creating 125,000 new homes in 2024. The Ontario government cites high interest rates and a tough economic environment as pervasive challenges for homebuilders.

“The challenge remains supply,” says Fillier. “We know from experience that Ottawa’s inventory leans tight and can swing quickly from balanced territory to a seller’s market — which can compound affordability and accessibility challenges. Now is always the time for fresh action and innovative policies that can create much-needed inventory.”

OREB leaders and volunteers recently joined the Canadian Real Estate Association on Parliament Hill to present focused solutions to confront the ongoing housing supply crisis. With expertise and experience in market conditions and consumer needs, REALTORS® advocated to stimulate supply by investing in offsite construction technologies (i.e. prefabricated homes) and extending HST/GST relief for non-profit-built affordable ownership housing.

The MLS® Home Price Index (HPI) tracks price trends far more accurately than is possible using average or median price measures. 

The overall MLS® HPI composite benchmark price was $639,500 in October 2024, an increase of 0.4% from October 2023.

The overall MLS® HPI composite benchmark price was $639,500 in October 2024, an increase of 0.4% from October 2023.

The benchmark price for single-family homes was $724,500, up 0.7% on a year-over-year basis in October.

By comparison, the benchmark price for a townhouse/row unit was $506,900, up 1.6% compared to a year earlier. 

The benchmark apartment price was $407,500, down 3.4% from last year.

The average price of homes sold in October 2024 was $668,690 increasing 1.2% from October 2023. The more comprehensive year-to-date average price was $678,081, increasing by 0.9% from October 2023.  

The dollar volume of all home sales in October 2024 was $788.3 million, up 47.7% from October 2023.

OREB cautions that the average sale price can be useful in establishing trends over time but should not be used as an indicator that specific properties have increased or decreased in value. The calculation of the average sale price is based on the total dollar volume of all properties sold. Prices will vary from neighbourhood to neighbourhood.  

The number of new listings saw an increase of 10.4% from October 2023. There were 2,089 new residential listings in October 2024. New listings were 6.7% above the five-year average and 17% above the 10-year average for the month of October.

Active residential listings numbered 3,354 units on the market at the end of October 2024, a gain of 8.9% from October 2023. Active listings were 40.6% above the five-year average and 6.7% above the 10-year average for the month of October.

Months of inventory numbered 2.8 at the end of October 2024, compared to 3.8 in October 2023. The number of months of inventory is the number of months it would take to sell current inventories at the current rate of sales activity.

Alberta - Supply levels improving for higher-priced homes

Calgary, Alberta, November 1, 2024 – Sales gains for homes priced above $600,000 offset declines at the lower end of the market, resulting in October sales that were similar to last year. The 2,174 sales in October increased over September and stood 24% above long-term trends for the month.

“Housing demand has stayed relatively strong in our market as we move into the fourth quarter, with October sales rising over last month,” said Ann-Marie Lurie, Chief Economist at CREB®. “However, activity would likely have been stronger if more supply choices existed for lower-priced homes. Supply levels in our market are improving relative to the ultra-low levels experienced last year, but much of the gains have been driven by higher-priced units for each property type. This results in conditions far more balanced in the upper end of the market versus the seller's market conditions in the lower to mid-price ranges of each property type.” 

The gains in new listings relative to sales over the past six months have supported inventory gains in the city. As of October, 4,966 units were available, a significant improvement over the near-record low of 3,205 units reported last October. While inventories are starting to reach levels more consistent with long-term trends, the inventory composition has changed as nearly half of all the residential inventory is now priced above $600,000.

Adjustments in supply are helping move the market away from the tight market conditions experienced in the spring. However, conditions remain relatively tight, with 2.3 months of supply and a 67% sales-to-new listings ratio, and the months of supply does vary significantly by price range and property type. For example, detached homes priced below $700,000 are reporting less than two months of supply, while homes priced over $1,000,000 are reporting over three months of supply. This is likely resulting in different price pressures depending on price range and property type.

Overall, the total residential benchmark price was $592,500 in October, over 4% higher than last October and on a year-to-date basis, averaging over 8% higher than last year's levels. The unadjusted benchmark prices did ease slightly over last month due to seasonal factors, as seasonally adjusted prices remained relatively stable in October compared to September. 

Detached - Home sales rose to 1,071 in October, a gain over last month and nearly 10% higher than last year. While new listings were higher than last year, they slowed over last month, causing the sales to new listings ratio to rise to 69% and preventing any further monthly gain in inventory levels. With 2,199 units available, the months of supply remained near two months, a gain over the under two months reported last year at this time, but slightly lower than last month.

The unadjusted detached benchmark price was $753,900 in October, slightly lower than last month but still 8% higher than levels reported last October. Additional supply choices in the higher price ranges have taken some of the pressure off home prices. However, the recent monthly pullbacks are more related to seasonal conditions, as seasonally adjusted prices have remained relatively stable over the past three months.

Semi-Detached - Sales in October rose over last month and were over six% higher than levels reported last year at this time, contributing to the year-to-date growth of over three%. New listings for semi-detached homes have also been on the rise, supporting some steady gains in inventory levels. The shift in supply compared to demand has helped push the market toward more balanced conditions, especially for higher-priced properties. However, with only two months of supply, the overall conditions still favour the seller.

The unadjusted benchmark price was $677,000 in October, similar to last month and over 8% higher than last year. Year-to-date prices have averaged an over 11% gain. 

Row - Following a strong start to the year, sales activity has slowed since June. However, the pullback in sales is not due to a shift in demand but related to supply constraints. The declines in sales have been driven by homes priced under $400,000, the same segment of the market which reported a 35% decline in new listings. Year-to-date sales have remained relatively stable compared to last year, as pullbacks in the lower range offset the gains in the upper price ranges. Over 70% of the sales have occurred over $400,000, a significant shift from last year, where the upper end accounted for 47% of all the sales.

Improvements in supply did cause the months of supply to push above two months in October, the first time that has happened since the end of 2021. Supply growth, especially in the upper price ranges, has helped take some pressure off prices. However, with an unadjusted benchmark price of $456,600, prices are still over 8% higher than last October and year-to-date, which have averaged an increase of nearly 16%.

Apartment Condominium - While sales in October improved over last month, October marks the fifth consecutive month with a year-over-year decline. However, it is important to note that the 6,782 sales so far this year are only down slightly over last year's record high and nearly double the number of sales we have averaged over the previous decade. Higher lending rates, rising rents, and limited supply choices for lower-priced properties have fuelled demand for apartment condominiums. However, like other property types, sales declines were driven by pullbacks for lower-priced units due to a significant drop in supply. Inventory levels in October did rise over the previous year, with most of the gains occurring in the $300,000 - $500,000 range, supporting more balanced conditions in those price ranges. Meanwhile, conditions remained relatively tight for lower-priced condominiums.

The additional supply choices, especially in the higher ranges of the condominium market, are taking some of the pressure off prices. In October, the unadjusted benchmark price was $341,700, down over last month but still 11% higher than last year's levels. While much of the monthly decline can be attributed to seasonal factors, areas with a relatively high number of newly constructed and completed projects are impacting resale activity, resulting in a slightly higher monthly decline. Nonetheless, on average, year-to-date prices are nearly 17% higher than levels reported last year.

British Columbia -  Buyer demand surges in October 

Vancouver, BC – November 4, 2024 – After months of tracking approximately 20% below the ten-year seasonal average, Metro Vancouver1 home sales surged more than 30% year-over-year in October.

 The Greater Vancouver REALTORS® (GVR) reports that residential sales registered on the Multiple Listing Service® (MLS®) in the region totalled 2,632 in October 2024, a 31.9% increase from the 1,996 sales recorded in October 2023. This was 5.5% below the 10-year seasonal average (2,784). 

  “Typically, reductions to mortgage rates boost demand, and the strong October sales numbers suggest buyers may finally be responding to lower borrowing costs after waiting on the sidelines for months,” Andrew Lis, GVR’s director of economics and data analytics said. “To some market watchers, this rebound may come as a surprise, but with four consecutive rate cuts from the Bank of Canada – and more likely to come on the horizon – it was only a matter of time until signs of renewed strength in demand showed up.” 

  There were 5,452 detached, attached, and apartment properties newly listed for sale on the MLS® in Metro Vancouver in October 2024. This represents a 16.9% increase compared to the 4,664 properties listed in October 2023. This was 20% above the 10 year seasonal average (4,545). 

  The total number of properties currently listed for sale on the MLS® system in Metro Vancouver is 14,477, a 24.8% increase compared to October 2023 (11,599). This total is also 26.2% above the 10-year seasonal average (11,475). 

  Across all detached, attached and apartment property types, the sales-to-active listings ratio for October 2024 is 18.8%. By property type, the ratio is 13.4% for detached homes, 22.5% for attached, and 22.2% for apartments. 

  Analysis of the historical data suggests downward pressure on home prices occurs when the ratio dips below 12% for a sustained period, while home prices often experience upward pressure when it surpass 20% over several months.

 “While the strength in October's numbers is encouraging, one data point does not make a trend," Lis said. "Recent data shows that market conditions have been decidedly balanced, with prices easing over the past few months. With the recent uptick in sales, however, the attached and apartment segments are now tilting toward a seller’s market with the detached segment not far behind, suggesting the recent period of price moderation may be nearing an end." 

The MLS® Home Price Index composite benchmark price for all residential properties in Metro Vancouver is $1,172,200. This represents a 1.9% decrease over October 2023 and a 0.6% decrease compared to September 2024. 

Sales of detached homes in October 2024 reached 724, a 25.5% increase from the 577 detached sales recorded in October 2023. The benchmark price for a detached home is $2,002,900. This represents a 0.3% increase from October 2023 and a 1% decrease compared to September 2024. 

Sales of apartment homes reached 1,393 in October 2024, a 33.4% increase compared to the 1,044 sales in October 2023. The benchmark price of an apartment home is $757,200. This represents a 1.6% decrease from October 2023 and a 0.6% decrease compared to September 2024. 

Attached home sales in October 2024 totalled 501, a 40.7% increase compared to the 356 sales in October 2023. The benchmark price of a townhouse is $1,108,800. This represents a 0.4% increase from October 2023 and a 0.9% increase compared to September 2024.