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Review of June sales in Toronto and Vancouver reveals a tale of cautious buyers and eager sellers

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By Murtaza Haider and Stephen Moranis

June sales data from Toronto and Vancouver, two of Canada’s most dynamic housing markets, indicate a struggle with sales and prices. Traditionally, early summer is a period of robust activity in housing markets. This year, however, prospective homebuyers remain cautious and hesitant, while sellers are flooding the market with new listings.

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Canadian real estate markets have struggled since interest rates began to rise in early 2022, resulting in higher mortgage payments for new buyers and those renewing their mortgages. The recent 25-basis-point cut in the prime rate has fostered optimism in the markets, but was not enough to motivate sidelined buyers, who might be anticipating further rate cuts and waiting until they reach their lowest levels in the current cycle.

This strategy has its pros and cons. Securing a mortgage at a lower rate can often be offset by rapidly rising prices, which tend to increase as interest rates decline.

A review of June sales in Toronto and Vancouver reveals a tale of cautious buyers and eager sellers. Last month, Toronto recorded 6,213 sales, a 16 per cent decrease compared to June 2023. Average nominal housing prices were also slightly lower year-over-year. Meanwhile, active listings increased by 67.4 per cent from last year, indicating weaker demand and stronger supply.

Toronto’s housing market is often spatially divided into the City of Toronto (known by its area code 416) and its surrounding suburbs (known by the area code 905). In June, prices for detached homes and condominiums declined more in the 905 than in Toronto compared to June of last year. Sales of detached homes saw a sharper decline in the 905, while condo sales fell more significantly in the 416 neighbourhoods.

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Average housing prices are frequently influenced by extreme values and do not account for variations in the type, quality, and size of homes sold over time. The MLS House Price Index (HPI) addresses these limitations by providing an estimate that controls for differences in size, quality, and other attributes.

The Composite MLS HPI, which covers all property types, was down by 4.6 per cent year-over-year for Greater Toronto. A comparison of regional markets within Greater Toronto revealed that the HPI declined less in the City of Toronto than in the populous suburban regions of Durham, Halton, Peel and York.

The HPI for apartments (condominiums) showed a larger year-over-year decline of 4.7 per cent in June compared to other property types. Since condo sales are more prevalent in the City of Toronto, Toronto’s regional HPI was weighed down by the 5.1 per cent decline in the city.

Not surprisingly, Vancouver showed similar trends. Greater Vancouver recorded 2,418 sales in June, almost 19 per cent lower than the same month last year. June 2024 sales are also significantly below the long-term trend over the past 10 years.

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The decline in sales contrasts with the increase in supply in Vancouver. About 14,182 dwellings were listed in June, a 42 per cent increase over June 2023. Current listings are more than 20 per cent higher than the 10-year average. These statistics suggest a buyer-friendly market, with the sales-to-active listings ratio down to 17.6 per cent in Vancouver.

Interestingly, the MLS HPI for all property types in Vancouver in June 2024 was slightly higher than the same time last year. Over three years, the HPI in June 2024 showed a double-digit increase in most local markets within Greater Vancouver, except for West Vancouver, which saw a decline of 1.7 per cent.

The large increase in listings indicates that sellers may need to offload properties that have become too expensive to carry due to higher monthly mortgage payments.

Leading economists and most homebuyers expect further interest rate cuts this year. Since housing prices are still below their long-term expected average values, waiting for lower mortgage rates makes strategic sense for most buyers.

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For those who prefer to buy now and avoid the rush of buyers later, which often leads to bidding wars, a prudent approach would be to opt for a variable-rate mortgage and switch to a fixed later when mortgage rates decline.

Murtaza Haider is the associate dean of graduate programs and the director of Urban Analytics Institute at the Ted Rogers School of Management, Toronto Metropolitan University. Stephen Moranis is a real estate industry veteran. They can be reached at the Haider-Moranis Bulletin website,

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