Canadian real estate is slowly coming out of the woods. Oops, make that fast! In fact, major markets across the nation including Toronto and Vancouver are recovering swiftly in a major influx of buyers while several other towns and cities are also seeing a surge in housing demand that is keeping prices at higher levels and listings fewer for prospective owners. Canadian real estate buyers are hugely busy at this time of year as per industry players which is a good sign.
CREA (Canadian Real Estate Association) has already released information which clearly indicates how the ratio for sales to new offers or the SNLR went up throughout the nation for November, 2019. The biggest increases in SNLR were seen in the Eastern Canada region which has several popular real estate markets.
Learning more about the SNLR
The SNLR or the ratio of sales to new listings is an indicator in the real estate industry in Canada for assessing market demand. This is basically the ratio of the homes that are sold to the new listings available for buyers in the market. This figure will give industry players an idea of how fast homes are being sold in the market in comparison to the number of people who are selling off properties. The higher this figure goes, the higher the chances for a rise in prices in the near future. In case the ratio is lower than 40%, then the market is favorably poised towards buyers or can be called a buyer’s market. This happens when prices are falling.
A market that is balanced has the ratio between 40-60% on an average with proper demand valuation in the market. Additionally, any ratio above 60% indicates a market favorably poised towards sellers or a seller’s market. This is where increases in pricing may be expected soon. There are several real estate markets where this ratio changes swiftly and it becomes important to track the same consistently in order to gauge demand and expected price movements.
Eastern Canadian realty markets witness huge demand
Demand has surged considerably in several Eastern Canadian housing markets. Halifax is the fastest-growing market in November 2019 for this region, followed by Ottawa and Montreal. Halifax witnessed growth of 12.8% (year over year) in the SNLR for November 2019 at 77.6% which is an astounding figure indeed and indicates huge customer demand for real estate. This is the highest such increase in the SNLR ratio throughout the nation for this period.
Additionally, Montreal witnessed SNLR standing at a whopping 77.2% which indicates growth of 7.7% (year over year). Ottawa had a ratio of 77.1% which indicated 7.6% of growth (year over year). These were the three fastest growing housing markets in Canada and all three of them are situated in the Eastern region.
Southern Ontario and Victoria, BC witness considerable drops in SNLR
Buyers will be at an advantage in the Southern Ontario and Victoria, BC housing markets. Windsor witnessed a considerable decline of 6% as compared to the previous year to achieve an SNLR of 69.8% which is still high nonetheless. London had 72.8% which indicates de-growth of 2.4% in SNLR (year over year). Victoria had the third biggest fall in SNLR of 1.9% with the ratio standing at 60% here. Most of these markets still have high demand which is indicated by their current SNLR figures.
Yet, the current trends indicate an impending fall in prices or greater price stability, something that will work to the advantage of home buyers.
Balanced markets observed in Canada’s two biggest cities
Two of Canada’s biggest real estate markets, namely Vancouver and Canada, continue to remain balanced as per the latest reports and studies. For November 2019, the SNLR touched 57.1% in Toronto, indicating 6.9% of growth (year over year), while it touched 46.6% in Vancouver, indicating de-growth of just 0.2% (year over year). Both markets continue to remain balanced and neutral although Toronto has witnessed positive growth overall. Vancouver’s housing market remains near-flat in comparison to thresholds witnessed in the same period in 2018.
Relative housing demand is thus increasing considerably throughout Canada and this is being felt more rapidly in Eastern Canada. Stocks in winter are usually on the lower side but the number of buyers has shot up hugely in 2019 and the momentum should continue well into 2020. Experts feel that the market is witnessing a lot of pent-up demand which remained muted at the beginning of 2019. Growth in sales figures and faster absorption of new listings will naturally boost the real estate market across Canada in 2020 and beyond.