Through increasing COVID-19 restrictions, the importance of finding a suitable “home” has 2020 on track to be a historic year for Canadian real estate home sales. As reported by the Candian Real Estate Association (CREA), since November 2019 new listings have grown 15%, albeit showing fewer transactions annually in some markets – particularly in some of Canada’s larger markets such as Toronto and Vancouver. However, despite declining inventory, sales activities have continued to set records with November 2020 pulling in a 32% year-over-year growth in home sales nationally. Home prices for the month grew 14% since last year to $603,344.
To see how competition between buyers and sellers panned out in some of Canada’s major markets, Zoocasa, a real estate brokerage, compiled the sales and new listings data across 25 regions for the month of November.
By comparing the sales-to-new-listings ratio (SNLR), Zoocasa determined the degree of supply and competition local buyers faced within each city. The SNLR is calculated by dividing the sales by new listings of a certain time period:
- An SNLR under 40% depicts a buyer’s market: where new listings outstrip sales, and buyers have greater choice
- An SNLR between 40% and 60% depicts a balanced market: where demand and supply are in balance
- An SNLR over 60% depicts a seller’s market: where sellers may have the upper hand as demand outpaces supply
The results of the report showed that Canadian markets as a whole mostly favoured sellers, with an overall SNLR of 90%. In November all major Canadian markets strongly favoured sellers, compared to last year, in which 6 of the markets showed balanced market conditions and the overall SNLR was 79%.
3 of the 5 most expensive markets became less competitive
Although all cities showed conditions of a seller’s market, of the 25 major cities included in the report, 3 of the top 5 most expensive cities by home price saw a drop in SNLR compared to last year November.
In Greater Vancouver, buyers faced greater competition with an SNLR of 75%. However, compared to last year, the SNLR for the area fell 8%, when the SNLR was 83%. The average home price in the region rose 8% y-o-y to $1,084,001, making it even harder for aspiring buyers to find cheap houses for sale in Vancouver.
Greater Toronto also saw an uptick in the average home price, growing 13% from last year to $955,615. This average is the third-highest price for the region (the highest and second-highest were set in Oct and Sep 2020, respectively, and reveals that affordable houses for sale in Toronto are becoming harder and harder to come by. The housing market strongly favoured sellers, with an SNLR of 76%, but also showed a decrease when compared to its SNLR of 82% in November 2019.
Hamilton-Burlington, which was the 5th most expensive region with an average home price of $724,730 (up 21% from last year) also saw a minimal decrease in its SNLR annually from 94% to 93%.
Cheapest cities strongly favoured seller’s compared to 2019
In comparison, some of the cheaper cities by average home prices showed a significant increase in the SNLR and housing competition, when compared to 2019.
In Trois Rivieres, the cheapest city with an average home price of $200,270 (up 13% y-o-y), the SNLR was 92% compared to 76% last November.
Both Saguenay and Regina crossed the threshold of a balanced market into a seller’s market this year. Saguenay and Regina which once showed balanced market conditions one year ago now had an SNLR of 94% (up from 52%) and 77% (up from 49%), respectively. The average home price in Saguenay increased by 21% to $209,984 and the average home price in Regina increased 7% to $300,640.
Check out the infographic to see which Canadian housing markets were most and least competitive in November, and how they compared to the same time period in 2019.
The sales-to-new-listings ratio is calculated as the number of sales divided by new listings.
Home prices, sales and new listings were sourced from the Canadian Real Estate Association.