Category: News

Originally published on January 5, 2024, by Marcus Lu, with graphics and design by Miranda Smith*

In a recent detailed analysis, the Canadian real estate landscape of 2023 has been meticulously charted, showcasing the fluctuating housing market across various provinces and territories. This comprehensive report, initially featured on the Voronoi app, presents a dynamic bar chart representation of the housing markets in Canada, focusing on the percentage growth in prices from September 2022 to September 2023.

A Decade of Surge: Canadian Housing Prices Over the span from 2010 to 2022, the Canadian housing market witnessed a staggering 90% increase in real estate prices. This surge positioned Canada as one of the global leaders in expensive and less affordable housing sectors.

2023: A Close-Up View The article offers an in-depth look at the average housing prices across Canada’s provinces and territories for the year 2023, with the exception of Nunavut. The data, sourced from the Canada Real Estate Association (CREA), combines average figures from provincial entities and benchmark statistics derived from CREA’s MLS® HPI tool.

Understanding Benchmark Homes The concept of a “benchmark home” is crucial in this context. It refers to a property that embodies the typical characteristics of homes in its area, thereby providing a more accurate reflection of prices by accounting for often overlooked features like living area size and the presence of unfinished basements.

Price Dynamics: A Provincial Breakdown The report ranks the provinces and territories based on their year-over-year price growth, highlighting significant trends. For instance, the Northwest Territories saw an exceptional 40% increase in average house prices, reaching over half a million dollars in September 2023. This contrasted with the national average of $640,000.

The Standout Performers While the Northwest Territories led with a 46% increase, other regions like Nova Scotia, Quebec, and Alberta also showed notable growth. Conversely, the Yukon experienced a slight decline.

Emerging Patterns and Predictions The rapid price increase in the Northwest Territories, attributed to limited supply and heightened wildfire risks, was a unique phenomenon. However, every other region, except the Yukon, experienced some level of growth. British Columbia and Ontario, the priciest regions, might see a dip in prices in 2024, despite a surge in housing supply.

This analysis offers a vital perspective for real estate professionals and investors, highlighting the diverse and ever-changing landscape of Canada’s housing market in 2023.

For more detailed insights and data, the original article can be accessed on the Voronoi app or through its original publication by Marcus Lu, featuring graphics and design by Miranda Smith.

The Toronto Regional Real Estate Board recently released housing data for the second quarter of 2023, providing a glimpse into how the market in Brampton is shaping up this year.

As one of the fastest growing cities in the GTA, Brampton’s real estate trends are always top of mind for buyers, sellers, and agents alike.

The data shows that while the frenzied market of 2021 and early 2022 has cooled considerably, the correction many predicted has not materialized in a significant way. Rather, prices in Brampton remain high while sales volumes have slowed down.

This points to a market that is re-balancing but still competitive for buyers. Sellers who price their homes appropriately can still expect healthy interest.

In this report, we’ll break down the key statistics from Q2 2023 and what they mean for Brampton’s real estate outlook for the rest of the year. Whether you’re looking to buy, sell or invest, understanding where the market is heading will help you make informed decisions.

The data suggests Brampton remains a strong market, albeit one that is transitioning from an extreme seller’s market to something more moderate.

Sales Activity Slows Down but Prices Remain High

The most telling statistic is the year-over-year drop in total sales. There were 659 existing home sales in Brampton in Q2 2023, down 15% from 780 in Q2 2022. This cooldown was expected given rising interest rates meant to tame the overheated market. Sales are returning to more normal levels after the frenzy of the past 2 years.

However, while sales declined, average prices increased across Brampton. The average selling price for all home types was $1,043,704 in Q2 2023, up 5% from $1,002,450 last year. This divergence of sales decreasing while prices hold steady points to a tempering rather than collapse.

Detached homes, always in high demand in the suburbs, saw the strongest price appreciation. The average detached price jumped to $1,052,338, up 10% from $960,000 in Q2 2022. With more modest price growth for condos and townhouses, low-rise detached remains the engine driving Brampton’s market.

The takeaway so far? Buyer demand has cooled from its peak but supply is still limited enough to put upward pressure on prices. Sales activity has normalized but no dramatic price corrections yet. For buyers, less competition but still high asking prices.

What’s in Store for the Rest of 2023

The data from Q2 provides clues on where Brampton’s market is headed for the remainder of 2023. Several key factors will influence activity and prices.

Interest Rates

The Bank of Canada has aggressively raised interest rates in 2022 and early 2023 to combat high inflation. The benchmark rate sits at 4.5% as of July, up from just 0.25% at the beginning of 2022. This has pushed mortgage rates higher, reducing purchasing power and cooling demand. Expect rising rates to be the biggest drag on sales through the end of 2023.

Economic Uncertainty

Recession risks are mounting with inflation still high, rates rising, and global growth slowing. Consumer confidence has dropped which may further deter buyers. However, Brampton’s market has so far brushed off economic worries as job growth remains solid. Employment trends in the coming months will be key to watch.

Imbalance Between Supply and Demand

The sales to active listings ratio shows demand exceeds supply in Brampton. Though demand has fallen, supply is still constrained. This imbalance prevents a more dramatic slide in prices. More listings may come onto the market in the fall. But builders are slowing construction, limiting new inventory.

Overall, expect sales to continue easing while prices remain relatively firm through 2023. There are deals for buyers willing to search, unlike last year’s frenzy. But no dramatic dips on the horizon barring a sharp rise in unemployment.

Key Takeaways for Brampton’s Market

The Q2 2023 real estate statistics from TRREB reveal a market that has cooled from last year’s feverish pace but remains relatively healthy.

For buyers, the takeaway is that competition has eased with fewer bidding wars. However, prices remain elevated as demand still outpaces supply. Being pre-approved and ready to act quickly on the right listing is advised. Focus on value segments in Brampton like condos and townhouses where price growth has been more modest.

Sellers still have the upper hand given the sales-to-active listings ratio. But pricing correctly is critical. Chasing last year’s prices could mean sitting on the market longer. Review comparables thoroughly and price just slightly below market.

Investors may want to monitor segments like Brampton East Industrial and Claireville Conservation for future development potential.

While sales have tempered from their 2021 peak, Brampton remains a strong market thanks to its affordability and growth prospects. The data shows resilience even as rates rise. Staying informed on local conditions is key for navigating the path ahead.

The Canadian real estate market has been experiencing a significant cooling down in recent months. This trend is characterized by a slump in home sales, a decrease in benchmark prices, and an increase in new listings, particularly in Ontario and Toronto[1][2].

The Slump in Home Sales

The Canadian Real Estate Association (CREA) reported a decline in home sales for three consecutive months, with sales volume inching lower every month since June 2023[1]. This trend is also evident in Toronto, where home sales plummeted by 12% from August and 7.1% year over year[4].

Decrease in Benchmark Prices

The CREA’s national price index slipped by 0.3% during September 2023, marking its first decline since March of the same year[1]. This decrease is primarily due to a sharp slowdown in Ontario, while in most other provinces, prices are still inching higher, albeit at a slower pace[1].

Increase in New Listings

An increase in new listings is another significant trend in the cooling Canadian real estate market. In Toronto, there were 16,258 new listings in September 2023, a 32% increase from August and 44.1% higher than a year ago[4].

The Role of Interest Rates

The rapid escalation in interest rates has been a key factor in the slowing sales trend[1]. Economists agree that the housing market is in for a bumpy ride as long as interest rates remain at their current level[1]. Lower interest rates might be the only thing that could revive Canada’s housing market as supply outpaces demand[4].

The Impact on Sellers and Buyers

The cooling market has led to a vast disconnect between sellers, who are stubbornly trying to get high prices, and buyers looking for a bargain[1]. This disconnect is causing a surge of listings with price changes, indicating that sellers aren’t getting offers at their asking price and are trying to adjust on the fly to attract buyers[1].

The Future of the Canadian Real Estate Market

Despite the current cooling trend, the long-term outlook for the Canadian real estate market is positive[3]. However, the market is expected to remain on the slower side until next year, as buyers seem content to stick to the sidelines until there’s more evidence that interest rates are indeed finally at the top[1].

In conclusion, the Canadian real estate market is currently experiencing a cooling down phase, characterized by a slump in home sales, a decrease in benchmark prices, and an increase in new listings. This trend is largely due to the rapid escalation in interest rates, causing a disconnect between sellers and buyers. However, the long-term outlook for the market remains positive, with the expectation that the market will pick up pace once there’s more evidence that interest rates have peaked.

Citations:
[1] https://www.cbc.ca/news/business/crea-housing-september-1.6994989
[2] https://www.movesmartly.com/articles/as-toronto-housing-market-cools-inventory-builds-october-2023-market-update
[3] https://www.pwc.com/ca/en/industries/real-estate/emerging-trends-in-real-estate.html
[4] https://financialpost.com/real-estate/mortgages/interest-rates-drive-canada-housing-market-coming-months
[5] https://financialpost.com/news/housing-market-could-spur-bank-of-canada-cut-rates-sooner
[6] https://www.noradarealestate.com/blog/toronto-housing-market/
[7] https://www.moneysense.ca/spend/real-estate/whats-affecting-canadas-real-estate-and-housing-market/
[8] https://www.linkedin.com/pulse/dynamic-duo-interest-rates-inflations-impact-torontos-ari-zadegan-laeyc