Despite a modest slowing in market activity in April compared to March, selling prices for all major home types remained very high. Low borrowing costs during COVID-19 clearly had an impact on the demand for and price of ownership housing. While the pace of price growth could moderate in the coming months, home prices will likely continue on the upward trend. Renewed population growth over the next year coupled with a persistent lack of new inventory will underpin home price appreciation.
Ontario - Home Sales in The Greater Toronto Area St a New Record For April
Toronto, 04 May 2021 -- Home sales in the Greater Toronto Area (GTA) set a new record for April and amounted to more than quadruple that from April 2020 – the first full month of the pandemic. Bucking the regular seasonal trend, April 2021 sales actually declined month-over-month. A similar trend was noted for the number of new listings reported.
GTA REALTORS® reported 13,663 sales through TRREB’s MLS® System in April 2021 – a 12.7% decrease compared to March 2021, but more than quadruple the number of sales reported in April 2020, when the economic impact of COVID-19 was arguably the worst. Compared to the ten-year sales average of 10,000 for April 2010 to April 2019 period, the April 2021 sales result was up by 36.6%.
New listings followed a similar track – down by 8.4% compared to March 2021, but more than triple the number of new listings reported in April 2020. Compared to the ten-year new listings average for the April 2010 to April 2019 period, the April 2021 new listings count was up by 18.3%.
“While sales remained very strong last month, many REALTORS® noted a marked slowing in both the number of transactions and the number of new listings. It makes sense that we had a pullback in market activity compared to March. We’ve experienced a torrid pace of home sales since the summer of 2020 while seeing little in the way of population growth. We may be starting to exhaust the pool of potential buyers within the existing GTA population. Over the long term, sustained growth in sales requires sustained growth in population,” said TRREB President Lisa Patel.
The MLS® Home Price Index Composite Benchmark was up by 17.8% year-over-year. The Composite benchmark also increased on a monthly basis, but the pace of monthly growth decelerated. The average selling price of $1,090,992 was up by 33% compared to April 2020 but was basically flat relative to March 2021. This was in contrast to most years in the past when the average selling price increased between March and April.
“Despite a modest slowing in market activity in April compared to March, selling prices for all major home types remained very high. Low borrowing costs during COVID-19 clearly had an impact on the demand for and price of ownership housing. While the pace of price growth could moderate in the coming months, home prices will likely continue on the upward trend. Renewed population growth over the next year coupled with a persistent lack of new inventory will underpin home price appreciation,” said TRREB Chief Market Analyst Jason Mercer.
Ottawa - April’s Resale Market Starts Strong and Sputters
Ottawa, May 5, 2021 -- Members of the Ottawa Real Estate Board sold 2,402 residential properties in April through the Board’s Multiple Listing Service® System, compared with 911 in April 2020, an increase of 164%. April’s sales included 1,859 in the residential-property class, up 166% from a year ago, and 543 in the condominium-property category, an increase of 155% from April 2020. The five-year average for total unit sales in April is 1,830.
“As the typical spring market ramped up, April was poised to be the strongest on record with over 3,200 new listings of properties for sale. Most of these properties entered the market before the province’s stricter lockdown order was announced midway through the month. At that point, the trajectory sputtered, and while it continued to be active, it followed a noticeable decline as Sellers responded to the government’s resolution to reduce the spread of Covid-19,” states Ottawa Real Estate Board President Debra Wright.
“Nevertheless, the number of transactions managed to surpass unit sales recorded in previous Aprils, and we presume the figures would have been even higher in different circumstances,” she adds.
“As I had cautioned last month, the percentage increases over 2020 figures are vastly skewed due to the first State of Emergency last spring, which had initially slowed down the real estate market. Thus, the 155 to 166 percent increases in unit sales are simply not valid results. We recorded 2,026 sales in April 2019 and 2,024 in April 2018. These figures provide a more reasonable comparison, which is a 19% increase in overall sales compared to those pre-pandemic years.”
April’s average sale price for a condominium-class property was $427,145, an increase of 30% from last year, while the average sale price for a residential-class property was $743,204, an increase of 42% from a year ago.With year-to-date average sale prices at $734,682 for residential and $418,792 for condominiums, these values represent a 35% and 20 percent increase over 2020, respectively.*
“These accelerated price increases boil down to a lack of supply and will continue to be a challenge for Buyers until more inventory becomes available – it’s fundamental supply and demand economics. Certainly, April’s substantial increase in new listings, 19% higher than the five-year listing average and over 400 units more than the previous month, gives us cautious optimism. When the Stay-at-Home order concludes, we hope that pent-up supply will bring some much-needed housing stock to the resale market,” suggests Wright.
“However, there are many factors at play which make it difficult to forecast the path of Ottawa’s real estate market: interest rate modifications, the skyrocketing cost of building materials, the Office of the Superintendent of Financial Institutions (OSFI) proposal to increase the mortgage stress test, changing consumer perspectives with some Buyers opting to move to outlying communities and Quebec, etc.”
“On the one hand, record low-interest rates, increased household savings, a strengthening economy, and a continued focus on living space during the pandemic are all factors that bolster demand, while steady price growth is encouraging more Sellers to list their home. On the other hand, some people are truly struggling and small businesses are closing their doors. It’s complicated, it’s out of balance, and the course of our local market is not entirely predictable at this time,” Wright concludes.
Alberta - Demand for homes remains high with record sales in April
City of Calgary, May 3, 2021 –- There were 3,209 sales in April, a new record high for the month, as Calgary's housing market continues to bounce back from the pandemic lows recorded in 2020.
“Despite entering the third wave of COVID-19, there is more optimism of economic recovery when the economy re-opens,” said CREB® chief economist Ann-Marie Lurie.
“However, the recent surge in home sales could be a result of potential buyers wanting to enter the market before any further changes occur in prices, interest rates and lending policy. This could erode some of their purchasing power.”
Recent price gains and tight market conditions have also encouraged many sellers to list their home this month. However, demand was strong enough to absorb the additional supply, ensuring the market continues to favour the seller.
With 4,670 new listings coming onto the market in April, inventory levels trended up relative to last month and last year. With the elevated sales, the months of supply remains below two months.
Persistently tight market conditions are causing significant upward pressure on prices. For the second consecutive month, the unadjusted benchmark price rose by more than two% compared with the previous month and more than nine% compared with last year’s levels.
While sales improved across most price ranges, product priced above $600,000 represented 25% of the sales that occurred this month. This is a significant increase from last year when they only represented 12% of sales. The shift in distribution is causing both the average and median prices to record double-digit year-over-year price gains.
HOUSING MARKET FACTS
Detached homes hit a new record high for the month with 2,046 sales in April.
Gains in new listings helped support stronger sales, but they did little to ease the persistent sellers’ market conditions. The months of supply remained well below two months in this segment, which is contributing to a steady climb in prices.
As of April, the benchmark price rose to $529,100. This is nearly 11% higher than last year and more than $30,000 higher than levels recorded at the start of 2021. The recent gains were enough to push the benchmark price to a new high, reflecting full price recovery from 2014 levels.
Strong price gains occurred across most districts in the city thanks to persistently tight conditions. However, the pace of price adjustments did vary depending on location. The City Centre district has seen the slowest rebound and prices remain nearly seven% below previous highs.
Semi-Detached - Following several months of strong sales, year-to-date sales reached record highs in April with 888 sales.
This is the only property type to reach record highs based on year-to-date figures. Gains occurred across every district and price range. Like the other sectors, gains in new listings were not enough to move the market out of sellers’ conditions, as the months of supply remained below two months.
The tight market conditions supported price growth across all districts, with the strongest year-over-year gains occurring in the North, North West, and South East districts. In April, year-over-year price gains in these districts were above 12%, which was enough to support new monthly record-high prices.
Row Houses - After the first four months of the year, row sales totalled 1,217 units. This the best start to the year since 2007, and well above long-term averages.
New listings in this sector have also been on the rise, causing inventories to trend up. Supply has risen above levels recorded last April, but strong sales compared to inventory levels have caused the months of supply to remain just above two months. This is significantly lower than the longer-term average, which is closer to four months.
While these conditions have only persisted over the past three months, prices have been slower to climb. As of April, row benchmark prices climbed to $293,400. Prices have been trending up across all districts of the city, but they remain well below previous highs.
Apartment Condominium - Further improvements in April resulted in 1,280 year-to-date sales in this sector, which is the strongest sales seen over the past six years.
New listings also remained high compared to typical levels and inventories continued to rise. There was more inventory in the market, but the improvement in sales did cause further reductions in the months of supply.
In April, the months of supply was just over four months. This is fairly consistent with longer-term trends and reflects the most balanced conditions seen for some time. With less oversupply in the market, prices have been trending up and in April the benchmark price was $251,900. This is more than three% higher than last year.
Price improvements did vary by location and it will take some time for prices to recover to previous highs.
For example, there was a two% year-over-year increase in the City Centre, where most of the condo sales occur, but prices remain nearly 17% lower than previous highs.