Apparently, the month of March hasn’t bucked the negative trend. The sales to new listings ratio for the country witnessed a drop in March. This is according to the figures from the Canadian Real Estate Association. Frankly, from these figures, much of the drop recorded in the month of March came from the Western Canadian Market.
To ascertain the desire for real estate among people, the sales to new listings ratio (SNLR) is considered relatively credible. The number house resales and those listed for sales elsewhere are compared closely. Experts and stakeholders in the sector would, in turn, use these figures to define the state of the real estate market.
According to Betterdwelling.com:
Western Canadian Real Estate Has The Slowest Markets
No Canadian real estate market is a buyer’s market, but the closest markets are in Western Canada. Vancouver has the lowest SNLR at 40.5%, down 23% from last year. Edmonton fell to 44.1%, down 3.7% from last year. Fraser Valley fell to 46%, down 25% from last year – the largest drop in the country. None of these markets are entirely in a buyer’s market from this metric, but some segments of homes are.
But it’s not all that gloom and doom as housing starts climbed in the month of March as new home construction projects rose significantly compared to the previous month. Experts believe this showed the strength of the Canadian housing market.
The seasonally adjusted annual rate (SAAR) of housing starts was 192,527 units last month, up by 15.8% from 166,290 units’ month over month.
The SAAR of urban starts increased by 17% to 178,033 units. Multiple urban starts rose by 18.6% to 135,894 units, while single-detached urban starts increased by 12.1% to 42,139 units. Meanwhile, rural starts were estimated at a SAAR of 14,494 units, according to Canada Mortgage and Housing Corporation (CMHC).
Chief economist Douglas Porter at the Bank of Montreal isn’t sharing that optimism as he believes the result is “a tad disappointing” but believes the real estate sector is coming to terms with the numerous changes in policies.
According to livable.com, Porter insists there are several things at play in the Canadian housing market:
Several Factors Affecting the Canadian Housing Market
Beyond warmer weather ahead, Porter highlights three factors that should be supportive of higher home sales on the heels of improved activity in March, when home sales inched up a seasonally-adjusted 0.9 percent from February.
First, Porter cites “rate relief,” noting that lower interest rates are once again boosting home sales.
Last year, it was expected the Bank of Canada would continue hiking its policy rate, which impacts mortgage interest rates, but that’s no longer the consensus given a weaker-than-expected performance from the Canadian economy.
The second encouraging factor is Canada’s growing population. “It’s not running at the fastest pace in a generation,” Porter points out. Population growth is a key driver for housing markets as it creates demand for accommodations.
Mixed reactions continue to trail activities on the Canadian housing market. The month of March hasn’t exactly been as eye-opening as expected. Stakeholders in the sector are hoping on a much better performance in April.