The Canadian Real Estate Association (CREA) recently reported that smaller number of sales and larger inventories resulted in declines in Sales to New Listings Ratio (SNLR) across all markets except for Windsor, Montreal, and Ottawa.
According to Better Dwelling, Windsor-Essex’s ratio increased to 63.3 in July, climbing 11.64% from 2017. Montreal jumped to 66.7, up 11.17% during the same period. Ottawa, meanwhile, logged a figure of 67.5, gaining 9.93% from last year. Notably, a majority of these markets’ records were much lower compared to the ratios seen the previous year, despite the recent growth.
Treading the opposite path, select real estate markets in Southern Ontario saw rapid cooling. Niagara significantly dropped to 61 in July, down 23.46% from 2017. Toronto also declined to 48.7, falling 20.16% from last year. Hamilton declined to 61.9, registering a 17.14% decrease. Last year, all three markets were overheated, and as such this dampening was expected.
The same holds true for the three British Columbia markets that were extremely overheated over the past few years, as they were all observed to be cooling rapidly at the same time. Victoria saw its ratio decline to 65.5 in July, down 16.35% from 2017. Vancouver sank to 54.4, down 14.06% from last year. Finally, Fraser Valley tumbled to 61, recording a 11.34% loss from last year.
The cooling appears to be a result of “non-local factors.” As said in previous reports, higher interest rates and stricter lending rules hurt the sales in the country. Consequently, this allowed increase in inventory, which drove the SNLR higher in most markets.
“Sales declines typically lead to even stricter lending. Unless we see some form of stimulus, don’t expect these markets to change course in the near term,” Better Dwelling concluded.
