Toronto area\u2014Quiet summer<\/h2>\n
The action got even slower in August with home resales slipping a further 1.0% m\/m on a seasonally-adjusted basis. This summer\u2019s lull rolled back almost two-thirds of the sharp rebound this spring. What\u2019s restraining the market has less and less to do with a lack of purchasing options. New listings and inventories having been rising noticeably fast over the past five months\u2014including in August. Rather, it increasingly reflects sagging buyers\u2019 sentiment in the face of high interest rates, extremely poor affordability and a softening economy. Demand-supply conditions have quickly rebalanced after unexpectedly firming this spring. The sales-to-new listings ratio is in fact the closest its been to buyers\u2019 market territory since January. This swing is now weighing on prices, which edged lower for the first time since February. The aggregate MLS HPI for the Greater Toronto Area dipped 0.1% last month with both the single-detached and condo segments coming down. We expect activity and prices to remain mostly stagnant in the near term. <\/p>\n
Montreal area\u2014Prices still get modest but uneven support<\/h2>\n
A growing supply of homes for sale continues to boost transactions flows in the area. New listings increased sequentially for the fourth time in the last five months in August\u2014up more than 10% (seasonally adjusted) by our own estimate. This helped extent the uptrend in home resales, which now exceed year ago levels by 3.8%. Despite more sellers coming to market, demand-supply conditions remain a little tight at this stage. This provides modest but uneven support for property values. In August, the median price for a single-detached home gained 1.1% from July, whereas it edged lower by 0.5% for a condo apartment. Properties situated on the Island of Montreal generally recorded larger appreciation relative to Laval, and the North and South Shores. We expect further measured appreciation in the near term. <\/p>\n
Vancouver area\u2014Cautious mood dampens activity<\/h2>\n
The spring rally has run its course and a more cautious mood has taken the market over. Buyers have pulled back this summer, especially in August when we estimate resales fell more than 6% m\/m on a seasonally-adjusted basis. Clearly the Bank of Canada\u2019s back-to-back rate hikes in June and July unsettled many prospective buyers. Successive increases in the number of homes put up for sale since April\u2014which reached a 15-month high in August\u2014should have fired them up instead by offering opportunities to unlock pent-up demand that built during the year-long market correction. The net result is a more balanced market. And with this spring\u2019s tightness gone, prices are losing support. Vancouver\u2019s aggregate MLS HPI slipped slightly between July and August for the first time since March. We think the more cautious tone will keep prices on a flat trajectory in the period ahead.<\/p>\n
Calgary\u2014 Canada\u2019s hottest market?<\/h2>\n
The story is still one of strength for the Calgary market. We estimate August home resales were up a further 10% m\/m (seasonally-adjusted), following solid increases in the prior four months. Growing supply has facilitated those gains but barely made a dent in easing the market tightness. Inventories remain exceptionally low at this stage amid supercharged demand and explosive population growth. This makes for a highly competitive environment for buyers. Property values maintain strong upward momentum as a result. Calgary aggregate MLS HPI rose another 1.0%m\/m in August and up 7.9% from a year ago\u2014the most significant advance among major markets in Canada. We see little that will cool down the market materially in the short term.<\/p>\n
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