Sellers may finally be returning
Publishing date: Mar 08, 2022
More sellers entered the housing market in February, says RBC.PHOTO BY NATIONAL POST
Something that’s been missing for awhile from Canada’s housing market turned up last month — sellers.
Maybe the trigger was the almost certainty of a Bank of Canada rate hike on March 2, but more sellers entered the housing market in February, pushing up new listings across the country.
“One month doesn’t make a trend but if February is any indication, more sellers may be (finally) making their way into Canada’s housing market,” wrote RBC senior economist Robert Hogue in a new report yesterday.
No where was this more evident than in Calgary, where an estimated 69% surge in new listings from the month before set the stage for sales to hit a February record.
Housing is hardly a bargain yet. Calgary’s composite MLS Home Price Index climbed 5.9% between January and February or $27,000. Prices were up 16.1% from the year before.
Toronto, now Canada’s most expensive market, saw its MLS Home Price Index jump 6.4% from January — a more than $80,000 increase in one month. Prices here have soared $354,000 or 35.9% since February 2021.
Vancouver prices rose 4.6% from January, up 20.8%, or $226,000, from the year before. But an estimated 6% drop in resales and 12% rise in new listings from January could represent a first step toward a more balanced market, said Hogue.
The rise in new listings is important because sellers will play a central role in how the spring real estate market shapes up, said the economist.
If a “critical mass” of homeowners decide now is a good time to sell ahead of more rate hikes and possible housing policy aimed at cooling the market it could ease supply shortages and escalating prices.
If sellers don’t come back in significant numbers, prices will continue to soar until rates rise enough to dampen demand.
“We expect the next few months to tell much about the further direction of the market and prices,” said Hogue.
On many levels an easing would be welcome.
A recent international housing affordability report ranked Vancouver as the third least affordable market in the world, behind Hong Kong and Sydney.
The Demographia International Housing Affordability report also noted that severely unaffordable housing has spread from Vancouver to smaller markets such as Chilliwack, the Fraser Valley, Kelowna and markets on Vancouver Island.