Canadian housing market cooling down
While most regions in Canada are likely to see steadier prices next year, loftier valuations in Vancouver and, to a lesser extent, Toronto, will lead to moderate declines, according to a new report from BMO Economics. Recent data show a divergence in home sales between most regions and the priciest markets, said Sal Guatieri, Senior Economist, BMO Capital Markets. Both Vancouver and Toronto - which account for a combined one-quarter of the national population and home sales - are seeing sharply weaker sales and some softening in prices, and are vulnerable to a more material correction in the event of an unexpected jump in interest rates or drop in employment. Mr. Guatieri noted that both the Vancouver and Toronto housing markets are having a bumpier ride than elsewhere in Canada. According to the report, Vancouver’s sales have plunged 27 per cent year-over-year in the three months to October. With almost three new property listings for every one sold, buyers are sitting in the driver’s seat, lowering prices 3 per cent since the spring.
Meanwhile, Toronto’s housing boom is also cooling. Resale transactions declined 16 per cent year-over-year in the three months to October.