‘Softer’ values for detached homes bringing buyers back into market

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Millicent Wong
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Home sales increased in 40% of GTA neighborhoods in the second quarter, according to Re/Max research

Homes in Toronto. Homes in Toronto. Photo by James MacDonald/Bloomberg Files

Canadians looking for single-family homes returned to the market at “weaker” levels in the second quarter, according to a new release from Re/Max Canada.

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The report compared market activity in the first and second quarters of 2022 in terms of unit sales and prices, analyzing 60 Toronto Regional Real Estate Board (TRREB) districts, 16 regions within the Real Estate Board of Greater Vancouver (REBGV) and six areas in the Fraser Valley Real Estate Board (FVREB). Re/Max found that home sales increased in 40 percent of the Toronto metro area and 31 percent of the Vancouver area in the second quarter compared to the first quarter.

“For those buyers who were active in (the second quarter), improved housing affordability due to falling prices and the threat of higher interest rates was clearly the impetus for many to jump into single-family home ownership,” said Christopher Alexander, President of Re/Max Canada, in Thursday’s release.

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According to the report, there were some existing sellers in the city of Toronto who took the opportunity to trade for larger homes or more desirable neighborhoods closer to the city. “The difference between the sale price of an existing property and the purchase price of a new property … has narrowed significantly,” says the report, a shift that may work in the buyer’s favor given mortgage portability. Condominium owners have also benefited as the values ​​of their apartments and townhouses have remained relatively stable while those of single-family homes have fallen.

In the city of Toronto, the reference price for a single family home in February was $2,073,989. In July, it fell to $1,515,763 according to TRREB. Meanwhile, the benchmark condo price in the city of Toronto was $738,930 in July, down from a recent peak of $840,444 in March but still up 7 percent year-on-year.

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In Vancouver, the discounts aren’t as pronounced. For example, single family homes saw a benchmark price of $2,139,200 in April compared to $2,000,600 in July.

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“Shoppers shouldn’t expect big bargains,” said Elton Ash, executive vice president at Re/Max Canada.

“Sales-to-active listings remain in balance overall and even tight in some areas. In Vancouver, for example, supply was lower in 50 percent of markets this June than last year, and sales have declined accordingly. This trend is likely to keep prices fairly stable going forward,” Ash said.

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Despite the overall softening housing markets, active single-family home listings in June were nearly 19 percent below the 10-year average in GTA, about 12 percent below the 10-year average in GVA, and almost nine percent below the 10-year average. Fraser Valley average. The drop in supply comes at a time when developers are upping their stakes and shelving planned developments due to weaker demand. While the impact of these decisions will not be felt immediately, the decision to back out will have a significant impact on housing markets in these major centers later on.

Canada is projected to take in over 430,000 immigrants annually through 2024, according to the federal government’s revised target released earlier this year. Fifty percent of these newcomers will reside in the GTA.

“Stocks remain a mystery that politics cannot solve in the foreseeable future, either in the short or long term,” said Alexander. “This is a real challenge as the supply of single family homes remains low both historically and in the context of population growth and future needs. This will remain a critical factor impacting Toronto and Vancouver, which are now considered world-class markets.”

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