Sellers in Toronto and Vancouver Just Say No as Housing Markets Sink

Michael Babad, The Globe and Mail


Vancouver, Toronto hit

Homeowners looking to sell are pulling back or holding out - and buyers are taking a breather - in the fast-cooling Vancouver and Toronto markets.

Both cities, the focus of concern as Canada’s housing market slows, are feeling the heat, as the latest numbers show.

As The Globe and Mail’s Brent Jang reports today, sales fell almost 29 per cent in November from a year earlier, to 1,686, while prices declined by 1.7 per cent.

“Home sellers appear more inclined to remove their properties from the market today rather than lower prices to sell their properties,” said the realtor group’s president, Eugen Klein.

“On the other hand, buyers appear to be expecting prices to moderate.”

Indeed, new listings fell more than 14 per cent last month, and were almost 13 per cent below the 10-year average for the month of November.

“Sales are down 42 per cent from the past-decade norm, a victim of excessive valuations, tougher mortgage rules and the temporary suspension of the Immigrant Investor Program,” said senior economist Sal Guatieri of BMO Nesbitt Burns.

“Price declines have quickened, too, down 1.7 per cent year-over-year and off 4.5 per cent from the spring peak. Vancouver’s market is on the downslope of its historical roller-coaster ride, though low interest rates are keeping it on the tracks.”

According to the Toronto Real Estate Board today, sales in November fell 16 per cent from a year earlier to 5,793, with condos particularly hard hit. Average prices rose 1.6 per cent.

New listings fell 1.3 per cent, while active listings climbed almost 18 per cent.

“Stricter mortgage lending guidelines, including a reduced maximum amortization period and a purchase price ceiling of $1-million for government insured mortgages, have prompted some buyers to move to the sidelines,” said the group’s president, Ann Hannah.

“This situation has been exacerbated in the City of Toronto because the additional upfront Land Transfer Tax takes money away from buyers that otherwise could be used for a larger down payment.”

The cooling of Canada’s housing market is expected to play out across the country, and most observers expect a soft landing.

“Moderating home sales are expected to slow the pace of residential building, particularly in the overbuilt condo markets in Vancouver and Toronto,” Bank of Nova Scotia economists said in a new forecast.