Vancouver/Toronto Comparison: Condos Sales to New Listings

The condo markets of Toronto and Vancouver are heading in different directions according to October’s sales to new listings ratios. The October housing data from Vancouver shows a city that is on a year long decline. Meanwhile, Toronto is leaving behind their traditional winter drop to show consistently high ratios all year long.

The first table shows quarterly numbers for each city’s sales to new listings ratio for their condo market.

S to NL CondoSource: REBGV, TREB, Six Housing Sense

For both cities we see consistent patterns at consistent levels in the first few years of the chart.  The lines show ratios that predominately grow throughout the year before falling again the next January. Vancouver is the first city to break this trend by the end of 2015, and then Toronto follows in April of 2016. Not surprisingly, this is matched timing wise by when both cities started to make their real price gains. Where the two cities differ is how they began to behave after their first big price growths. In Vancouver, condos experienced their traditional January ratio drop only to spike once more in April and through to October. For Toronto, the sales to new listing ratio peaked in October 2016 and then settled into a new normal around 60% from then on to the present day.

Condos Oct trendSource: REBGV, TREB, Six Housing Sense

The second chart shows data points against the sales to new listings ratio’s six-year average for that month. These numbers show that each city saw their significant price gains when their ratios started to out perform the six-year average. For Toronto, where condo prices remain strong this performance trend continues, although October 2018 only fared 1% better than the average. In Vancouver’s case, after very high ratios from July 2015 to January 2018 the condo market has turned in a hurry with October falling 35% below the average for the month. If these low sales to new listings ratios spill into the winter, condo prices in Vancouver will likely continue their downward momentum.

As always, our final graph shows the two cities adjusted to remove a nine-month time shift. Vancouver’s line shows all quarters from January 2014 to the present, while Toronto’s line is adjusted by nine months and shows October 2014 to the present.

Condo S to NL time shift OctSource: REBGV, TREB, Six Housing Sense

The nine-month time shift once again shows the similarity of the two markets. We see each city peak, causing their first significant price increases only to slow down before rising again. It is at this point that we see the two cities differ. Vancouver had two strong rebound quarters again before dropping into their current ratio slump. For Toronto, we see its ratio drifting back towards the six-year average, missing the final spike Vancouver experienced. As the two cities have charted their own paths it will be interesting to see if Toronto’s line meets Vancouver’s in negative territory or whether it continues on its positive growth.

For both cities their condo market’s sales to new listings ratios fared better than their detached markets in October (Vancouver 43% to 37% and Toronto 62% to 47%); however, each city is showing signs that are worth monitoring. Vancouver’s benchmark condo price has already fallen slightly from its peak, and with continued low sales to new listings ratios this trend will likely continue.  As we have previously said, prices appear to lag behind the sales to new listings ratio, so the continued negative performance is troubling news.

For Toronto, it is a matter of whether or not the current high ratios can remain.  High ratios traditionally lead to high prices, and that is what the Toronto condo market is proving. As condo prices continue to rise, it will be interesting to see whether demand can continue to put pressure on the supply.  Or, like Vancouver, whether it will start to ease.

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