The Canadian housing market is teetering on the verge of favouring sellers despite the vast majority of local markets remaining balanced — for now.
In Scotiabank Economics’ latest Housing News Flash, Provincial Economist Mark Desormeaux assessed July conditions in 31 Canadian housing markets: he categorized 22 of them as balanced, while seven were seller’s markets and two were buyer’s markets.
Scotiabank Economics looks at cities’ sales-to-new listings ratios to determine where markets stand, as well as how the current ratios stack up to long-term norms.
On a national level, the sales-to-new listings ratio increased for the fifth straight month, reaching 59.8 percent, meaning that for roughly every 10 homes listed, six homes sell.
This is significant because ratios above 60 percent are generally considered to suggest a seller’s market, while the 40-to-60-percent range reflects balance and sub-40-percent ratios indicate buyer’s markets.
“While still indicative of a balanced market — 22 of 31 major cities reported balanced supply-demand conditions — the ratio continues to edge closer to sellers’ market territory and was at its highest point since January 2018,” Desormeaux explains in the report.
Of the 22 markets that were balanced, half moved some degree closer to seller’s market territory in July.
“Positive momentum continues across Canada’s regional housing markets after multiple years of policy-induced slowdown,” says Desormeaux.
In July, Moncton overtook Montreal as the top seller’s market with a sales-to-new listings ratio of 78.1 percent; the latter was scuttled to the second slot at 73.5 percent.
Regina maintained its position as the most clearly defined buyer’s market, with a ratio of 42.5 percent.
Looking ahead — and seemingly in spite of the sales-to-new listings ratio moving higher — Desormeaux suggests the market won’t reach previous heights. Instead, headwinds will emerge, limiting future activity.
“Going forward, we expect easing job creation after the surge seen in the early months of this year to result in more modest demand-side pressures,” he says.
“Still, interest rates remain stimulative and healthy population growth via stepped-up immigration will likely continue to put a floor under housing market activity for the next several years.”
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