Vancouver/Toronto: Condo Sales to New Listings

Over the past few weeks we have written several articles comparing the Vancouver and Toronto housing markets. When the October housing data is shared in early November we will be able to update the quarterly estimates to see if the trends we have discussed have held. In this post we will complete the first round of articles by examining the sales to new listing ratios of each city’s condo market.

The chart below shows each city’s sales to new listings ratio in comparison to its six year (2013-2018) average ratio for each month for condos. The six year monthly average ratio was used to illustrate when each market was experiencing supply decrease or growth in relation to that month’s general performance. When the chart is above zero the respective city is experiencing a tightening inventory (more sales to new listings). When it is below zero, more condos are available on the market in comparison to the norm for that month (less sales to new listings).

Condo S to NL

Source: TREB, REBGV, Six Housing Sense

Just as we saw from the detached housing markets sales to new listings ratio performances, the ratios climbed significantly in advance of the initial headline making price gains. Similarly, each city’s ratio began to fall as prices were continuing to advance before they too slowed. However, unlike what we observed in the detached housing market, neither condo market experienced negative numbers from its sales to new listing ratio. Each city fell back only to its six year average before starting to improve again. This may explain why we have witnessed the continued positive growth success of the condo market, while the detached markets of both Toronto and Vancouver have retreated from their peaks.

The exception to the positive sales to new listing ratio performance mentioned above is presented at the end of the Vancouver graph line, with its last two quarters. Vancouver’s ratio fell below its six year average in April and dropped considerably in July; falling 26% below its traditional July ratio. This information would suggest that Vancouver condo prices may be in trouble. July’s condo prices were up 14% year over year, but this is down from a recent peak of 30% gains experienced in January. The upcoming October housing data could be very interesting to learn more about where the Vancouver market is trending.

For those of you familiar with our comparison posts, you will know that Vancouver’s recent sliding ratio is of interest to us, as we have seen a high correlation between the two housing markets. This is particularly demonstrated if you shift Toronto’s timeline up by nine months and let Vancouver provide information possibly guiding Toronto’s future. The graph below shows this time shifted situation (Vancouver’s line shows Jan. 2014 to the present, while Toronto’s is Oct. 2014 to the present).

Condo TS S to NLSource: TREB, REBGV, Six Housing Sense

From the time shifted graph, we once again see a near perfect overlap between the two cities. Toronto’s ratio shows a few instances of stronger performances than Vancouver’s; however, overall the two lines show very equal histories. This leads us to the upcoming October housing data to extend these graphs. According to existing information, Toronto does not show any signs of experiencing a strong rise to match what Vancouver achieved before it started sliding down. This is not to say Toronto will go into the negative figures that Vancouver is now in, but we do anticipate the two lines to begin to part. Leading us to wonder what these sales to new listings ratios could mean for prices in both cities going forward?

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