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Business Briefing A ‘foul mood’ in Vancouver, a ‘floor’ in Toronto, a ‘new normal’ in Ottawa: The state of Canadian housing

Briefing highlights

  • State of Canadian housing
  • Stocks, loonie, oil at a glance
  • WestJet posts stronger profit
  • Required Reading

State of housing

Reports from local real estate boards highlight the sharp differences in housing markets across Canada.

From a “foul mood” in Vancouver and a “floor” in Toronto to a “new normal” in Ottawa.

We won’t get the national picture until mid-May, but what we’ve seen so far this month shows what Royal Bank of Canada calls the “very contrasting paths” of some markets.

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Starting in the west, Vancouver is in a deep slump that showed no sign of turning around with the April numbers, The Globe and Mail’s Brent Jang reports.

“The Real Estate Board of Greater Vancouver’s April market report released last week showed a persistent imbalance between demand and supply – giving buyers substantial swaying power over prices,” said RBC senior economist Robert Hogue.

“The benchmark price fell deeper with the pace of decline barely letting up,” he added, noting that price has now slumped 8.7 per cent since peaking last June.

Vancouver home sales tumbled 29 per cent in April from a year earlier though Mr. Hogue calculated they rose 2 per cent from March when seasonally adjusted.

“This could be a tentative sign of a cyclical bottom – or maybe not given the decidedly foul mood that continues to prevail in the market,” Mr. Hogue said.

“Vancouver buyers and sellers are still digesting the many housing policy changes at all levels of government, and it may take still longer for the market to turn around.”

Conditions, Mr. Hogue added, “were still definitely soft in Victoria,” as well.

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As The Globe and Mail’s Janet McFarland reports, Toronto is a different story, with sales rebounding almost 17 per cent last month from a year earlier.

Indeed, said Bank of Montreal senior economist Robert Kavcic, Toronto’s housing market “has found a floor.”

Seasonally adjusted, the Greater Toronto Area market is now at its strongest since the beginning of last year, he said.

“Keep in mind that the prior few months were heavily bogged down by nasty weather (including a 9-per-cent decline in February), so part of the jump reflects some pent-up demand,” Mr. Kavcic said.

“But, the market is also stabilizing, as we fully expected,” he added.

“Interest rates backing off have helped (both affordability and psychology), while broader supply-demand dynamics in the GTA remain very supportive.”

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RBC’s Mr. Hogue calculated that new listings in Toronto rose almost 15 per cent in April from March in “a sign that pent-up demand is plentiful.”

Notable, too, is that sales of single-family homes led the charge, which surprised the RBC economist.

“Properties with lower price points (typically seen in the condo segment) have been the most sought-after in the past couple of years,” he said. “It’s too early to tell whether this is a sign of improving affordability for single-detached homes.”

In other regions, “weak demand-supply conditions still apply downward pressure on prices in Calgary and Edmonton,” though there was improvement, Mr. Hogue said.

“Ottawa continued to stand out as one of Canada’s stronger markets, although very tight for-sale inventory was a limiting factor for activity in April. This could well be the ‘new normal’ in the near term.”

And in Regina, there was a “big pop in activity, though prices continued to decline.”

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Required Reading

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