RATE HIKE REALITY HITS REAL ESTATE

Vancouver down 34.1%, Halifax off by 25.5%

Real estate markets saw steep declines on both coasts in April, with Vancouver sales down 34.1 per cent and Halifax off 25.5 per cent. The country’s most populous real estate region, Toronto, outdid both with a posted 41 per cent drop in sales.

The interest rate increases forced through by the Bank of Canada in its effort to slow the country’s booming real estate scene also hit southern Ontario, where the traditionally hot, always-on Toronto-area housing market felt the brisk wind of regulation.

The number of sales in April 2022 plunged 41.2 per cent from April 2021, according to the Toronto Regional Real Estate Board, but prices rose 15 per cent to $1,254,436 — which was slightly off the average selling price of $1,300,082 in March 2022.

GTA realtors reported 8,008 homes sold through MLS in April 2022 — a 27 per cent decrease compared to March 2022.

“Based on the trends observed in the April housing market, it certainly appears that the Bank of Canada is achieving its goal of slowing consumer spending as it fights high inflation,” Toronto Regional Real Estate Board (TRREB) President Kevin Crigger said in a statement.

“Negotiated mortgage rates rose sharply over the past four weeks, prompting some buyers to delay their purchase. Moving forward, it will be interesting to see the balance the Bank of Canada strikes between combating inflation versus stunting economic growth and related government revenues as we continue to recover from and pay for pandemic-related programs,” he said.

The country’s most populous housing market “continued its adjustment to higher borrowing costs,” TRREB noted. “As has been the case with previous rate-tightening cycles, some homebuyers have moved to the sidelines to determine how they will reposition themselves in the marketplace.”

Toronto’s real estate rival, Vancouver, also experienced a dramatic slump in sales after home sales last month fell 34.1 per cent from the same time last year. April 2022 recorded just 3,232 sales compared with April 2021’s 4,908 sales.

But Daniel John, chairman of the Real Estate Board of Greater Vancouver, does not appear to despair. He sees it as a return to more normal levels.

“Over the last two months, we’ve seen home sales ease down from the record-breaking pace of the last year,” he said in a statement upon release of the results. “While (one month is) still a small sample size, the return to a more traditional pace of home sales that we’ve experienced so far this spring provides hopeful homebuyers more time to make decisions, secure financing and perform other due diligence such as home inspections.”

Price growth, too, has slowed. The MLS Home Price Index composite benchmark price for all Metro Vancouver residential properties — single-family, townhouse and condominium — hit $1,374,500, an 18.9 per cent increase over April 2021 but just a one per cent increase compared to March 2022.

John attributed the slowdown to increased interest rates and a new five per cent levy on empty homes — typically aimed at foreign purchasers who park their money in the region without living there.

In another recently volatile market, the Nova Scotia Association of Realtors said the number of homes sold in Halifax totalled 1,350 units in April 2022, a sharp decrease of 25.5 per cent from the record set in April 2021 — but still the second-highest level for the month in its history.

Montreal home sales dropped by 17 per cent from last year, making it the slowest April since 2017. The Quebec Professional Association of Real Estate Brokers recorded 5,124 homes sold in the Montreal area last month, down from 6,164 in April 2021.

The board says median prices for single-family homes in the Montreal metropolitan area rose 16 per cent to $580,000 in April 2022, and condo prices rose 15 per cent year-over-year to $410,000.

Moving west again, a different picture appears in Calgary. The benchmark price there reached $526,700 in April, up 17 per cent from the same month last year, the Calgary Real Estate Board reported. That figure was also up two per cent on a month-over-month basis, and as the Financial Post noted, it showed that higher interest rates had yet to bite into demand as the province’s economy rebounds.

The Canadian Real Estate Association declined to comment ahead of its April results, which are due out later this month.