The Detached Sales Struggles of Vancouver and Toronto

2018 has not been a banner year for the detached housing markets of Toronto and Vancouver. After years of gains Vancouver’s housing market is finally showing negative year-over-year returns, while in Toronto the city’s detached market can not recreate the momentum it had in 2016 and through the winter of 2017. The major issue for both cities right now is the low sales volumes each market is going through. What started for each city in 2017 has continued into 2018 and now appears to be heading towards 2019 with no end in sight.

The graphs below show the detached sales data for the city of Toronto and the Vancouver area. In each graph we see 2017 and 2018 sales figures predominately below the rates achieved from 2014 to 2016. For Toronto, while 2018 started drastically under the previous four years, the sales data was closely in line with 2017 numbers through the second half of the year; however, in Vancouver the 2018 numbers were distinctly under the comparable years.

TDSSource: TREB, Six Housing Sense

VDSSource: REBGV, Six Housing Sense

Examining sales figures is only valuable when reviewed in comparison to new listings. For both cities, new listings are essentially keeping pace with past years, if slightly falling behind in some months. This points to a potential inventory problem for both cities. A situation Vancouver already finds itself in, even if Toronto is holding on for now.

TDNLSource: TREB, Six Housing Sense

VDNLSource: REBGV, Six Housing Sense

Our final graphs show each city’s sales to new listings ratios over the past five years. Not surprisingly, 2017 and 2018 are lower than previous years. Vancouver finds itself primarily in buyer’s territory (buyer’s territory defined as below 40%), while Toronto is only barely staying above.

TDSNLSource: TREB, Six Housing Sense

VDSNLSource: REBGV, Six Housing Sense

2018 has one more month to report out before these real estate markets welcome in another year. Vancouver will hope 2019 brings an end to the falling prices of 2018. Toronto will continue to tell itself it has achieved the desired ‘soft landing’ and will bank on a good start 2019 to prove that. We will continue to follow these sales patterns and the threat of rising inventory to see if either of these wishes come true.

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