BMO: Calgary Market Re-awakening, Vancouver Correcting

Below is the housing excerpt from BMO`s October Provincial Monitor (click here to download full report )

BMO:  The Canadian housing market has cooled notably in recent months, with sales slumping more than 11% since March and price momentum ebbing in many cities—the stricter mortgage rules that took effect July 9th appear to have thrown some ice on an already-cooling market. But, real estate is local, and trends vary considerably across the country. As of August, most (12 of 22) major cities/regions of the country were still seeing balanced markets, while 6 exhibited tight conditions that favour sellers and 4 favoured buyers:

(Click to enlarge image)

Highlights of Some Notable Markets:

Calgary: Re-awakening… Activity is improving thanks to rising demand (strong population and income growth) and a gradual drawdown of the excess supply put up during the prior (2005-07) boom. Prices measured by the MLS HPI were up 6.5% y/y in August, and have regained about half of the declines seen during the recession, and conditions are on the cusp of a sellers’ market. Note that Calgary remains relatively affordable compared to Vancouver and Toronto, with prices little more than 4x median income.

Vancouver: Correction underway… There’s no longer any doubt that a correction is underway in Vancouver. Sales have plunged 26% y/y in the latest 3 months, while average prices have shed more than 10% in the past year. The more representative MLS Home Price Index, which accountsfor quality and sales mix changes, was also below year-ago levels in August (though just 0.5%), and the sales-to-new listings ratio was the lowest since the financial crisis, hinting at more softness ahead. At 10x estimated family income, Vancouver valuations are by far Canada’s loftiest.

Toronto: Mixed picture… Activity has softened significantly, and while we’re not quite seeing a full-scale buyers’ market, weak September sales results suggest Toronto is quickly moving in that direction. Note the diverging price trends between well-supplied condos (+1.7% y/y) and scarce detached single-family homes (+7.0% y/y)—there’s also potential for significant resale condo supply to hit the market in 2013.

Windsor: The dark horse… A recovering auto sector, 4-year labour deals struck between the Big Three and CAW, and a return to positive population growth are all supportive of Windsor’s nowfairly tight (by historical standards) and inexpensive market

One response to “BMO: Calgary Market Re-awakening, Vancouver Correcting

  1. I doubt if vancouver real estate market would be ever back to normal. house for sale in vancouver are not found because sellers are not getting any good prices against their property

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