Canada’s housing market conditions show 2019 levels

According to the Canadian Real Estate Association (CREA), national home sales were down by 40% annually. Meanwhile, new listings fell by similar 38%.

It means that the COVID-19 pandemic keeps affecting Canada’s housing markets after health and safety measures hit most of the country in March. Many home buyers and sellers decided to stay out of the market until they are more confident about the pandemic’s influence on their home search.

In order to get a larger picture of how supply and demand are represented across Canada, Zoocasa used official monthly data from CREA to compare sales drops to decreases in new listings by determining the sales-to-new-listings ratio (SNLR) for 20 main housing markets.

Zoocasa says the SNLR is based on dividing the number of sales by the number of new listings for a certain period of time. In case the number is below 40%, few homes were sold compared to the number of new listings. It points to a buyer’s market. If the figure is above 60%, it means more homes were sold than the number listed, pointing to a sellers’ market. If the result varies from 40% to 60%, it means the market is balanced.

However, according to Zoocasa, the real estate market competition conditions across the country are still similar to the previous year.

Nationally, similar to 2019, the real estate market is still balanced with an SNLR of 55%, as 33,051 homes were sold in May and 59,977 homes were listed. Meanwhile, in May 2019, there were 54,874 sales and 96,830 new listings, with a 57% SNLR.

Eight out of the 20 markets analyzed, showed balanced market conditions, including Toronto and Vancouver.

In Toronto, housing sales were down by 54% annually to 4,606. At the same time, new listings fell by 53% with 9,104 new listed homes. Zoocasa says with the similar pace of sales decrease and new listings, buyers and sellers that showed activity in May, faced similar levels of competition to 2019. The Toronto SNLR was 51% last month and 52% a year earlier.

As the provinces keep reopening and COVID-19 restrictions softening, the market activity will start rebounding. This data could be useful for buyers who want to understand the level of competition at the market they would like to enter.