Toronto area: Slump ongoing while inventories mount<\/h2>\n
The market can best be described as lethargic this summer. A modest resales advance in June was mostly reversed by a 0.7% dip in July, leaving activity little changed from where it was in the spring (on a seasonally adjusted basis). Buyers are clearly looking for larger rate cuts amid strained affordability. The situation is livelier on the supply side, though. Inventories are accumulating rapidly as soft demand comes well short of absorbing the surge in properties up for sale. This is especially true of condo apartments where a wave of new unit completions this year boosted active listings by 64% from a year ago. Detached home listings are up less, although by a still considerable 48%. Home prices have stayed largely flat overall in the past four months. The aggregate MLS Home Price Index benchmark was $1.09 million in July, virtually unchanged from April. But it\u2019s down 5% from a year ago, reflecting last fall\u2019s mild correction. Condo prices accounted for most of the annual decline (-5.1%) with detached home prices (-4.3%) not far behind. We expect mounting condo inventories will put downward pressure on prices in the near term. Recovering demand later this year and into 2025 should contain that soft patch. <\/p>\n
Montreal area: Slow recovery on track<\/h2>\n
The pace may be slow but recovery is on track in the market. Home resales rose for a second straight month in July, up an estimated 0.4% from June and 12% from a year ago. Demand supply conditions are on still the tighter end of the scale, which supports mild gains in property values. Median prices climbed last month for both single-family homes (up 6% from a year ago) and condo apartments (4%). Inventories are gradually rebuilding across the entire region, yet remain historically low. This points to continued price appreciation in the coming months. If anything, lower interest rates would reinforce that trend. <\/p>\n
Vancouver area: Buyers stay on the defensive<\/h2>\n
The picture hasn\u2019t changed much over the last few months. Transaction activity is slow but trending slightly higher. Supply and demand are largely in balance with buyers holding more bargaining power than they did a year ago. The number of homes for sale is climbing\u2014inching closer to levels that prevailed before the pandemic. And, prices have stayed essentially flat. In July, Vancouver\u2019s composite MLS HPI was down marginally 0.8% from a year ago with condo apartments accounting for the decline. We see the potential for a mild price correction ahead if supply outpaces demand. We estimate new listings grew faster than home resales between June and July (on a seasonally adjusted basis). This could continue in the near term. High interest rates exert tremendous stress on many existing homeowners (including investors), and a growing share may be forced to sell\u2014fueling supply. On the other end, Vancouver-area buyers face the biggest affordability hurdles in the country, which is likely to constrain demand for some time. A material drop in rates will eventually alleviate tensions all round, but that is likely months away. <\/p>\n
Calgary: Steam seeps out but still hot<\/h2>\n
Some of the exceptional firmness in supply-demand conditions eased last month as more sellers came to market while buyers took a breather. We estimate new listings rose 6% between June and July, but home resales dipped more than 9%. These have resulted in a rise in properties for sale\u2014from extremely low levels\u2014and a further slowing in the pace of price appreciation. At 7.7%, the annual increase in Calgary\u2019s composite MLS HPI is still very robust though it represents a notable deceleration from 10.8% just four months ago in March. We think there\u2019s only limited room for further moderation given persistent tightness in the market and low inventories. Demand for housing remains extraordinarily strong amid explosive population growth, making it highly unlikely that prices will stall or decline anytime soon. <\/p>\n
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