Toronto/Vancouver Comparison: Detached Prices Update

A few weeks ago, we began our Toronto/Vancouver comparison series by reviewing the recent price histories of detached homes in the two cities. Focusing on quarterly prices, we saw how similar the price movements have been between the two cities, though with a nine month timeline delay on Toronto’s part. This post will be our first update to these figures showing what impact each city’s October housing data had on the trends we have seen to determine if Toronto still appears to follow in Vancouver’s footsteps.

The first graph shows the recent history of quarterly benchmark prices for each city.

Detached prices Oct 2018Source: TREB, REBGV, Better Dwelling, Six Housing Sense

We see from the monthly numbers that both cities are experiencing stalling prices. In Toronto, prices have been level since April, and really since last October, while Vancouver’s prices began to stall in July of 2017 and have even started to decrease in the past few months. From the comparison perspective, Vancouver’s prices remained flat for nine months before starting to fall. To this point, Toronto’s prices have now been flat for six months, meaning an uneventful winter followed by a slow spring could be on the way. The main difference between the two is that Vancouver experienced a stronger bounce back than Toronto did after its initial peak. This could actually help Toronto moving forward, as Vancouver is now giving back some of that second big gain.

Our second graph shows the year over year percentage changes of the benchmark prices for detached homes.

Detached YoY Oct 2018Source: TREB, REBGV, Better Dwelling, Six Housing Sense

In comparing the percentage changes, we see very similar movements in terms of increases followed by declines and then recovery; however, we also see Vancouver’s detached market showing stronger numbers overall. In Vancouver, the annual price changes never went into the negatives after the first major gain, whereas Toronto did post year-over-year losses. At present, the tables have turned with Vancouver now moving into negative numbers while Toronto is showing gains again. Of course, working from our hypothesis that Toronto trails Vancouver’s price movements by nine months, a Vancouver negative is not good for either city.

To illustrate that point, we will once again show our time shift comparison (Vancouver’s line shows January 2015 to the present, while Toronto’s is October 2015 to the present).

Detached TS Oct 2018Source: TREB, REBGV, Better Dwelling, Six Housing Sense

From the time shift we see that Toronto continues to perfectly follow Vancouver’s general movements, though at slightly lower rates. The October movement was to trend upwards, which Toronto achieved; however, in this market predicting a gain is far from ground breaking. The next few months will be where things get interesting. If Toronto is actually trending behind all of Vancouver’s actions, Toronto should see another price drop. A drop in prices is not being forecasted at all at this time, so a return to the negatives would really validate the nine month gap theory.

Overall, the October numbers continued to support the data that the two cities are experiencing the same highs and lows just nine months apart. We will continue to monitor through the winter to see if this trend holds.

Our next post will update the comparison of the sales to new listing ratios for the two cities.

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