Canada’s major real estate market has softened since the pandemic
- There are signs that the whole condo market is softening, and not just sales volumes.
- The trend is expected to go as markets reopen, but unemployment remains high.
- Ever since the pandemic began, only three markets in Canada saw an increase in sales faster than inventory.
COVID-19 softened most real estate markets in Canada and not just sales volumes alone. According to data by the Canadian Real Estate Association (CREA), Sales to New Listings Ratio (SNLR) declined in major markets. From February to May, all but three significant markets experienced inventory rise faster than sales.
SNLR: Only three markets experienced sales increase faster than inventory
SNLR is the number of sales, as a ratio of new listings. However, if the ratio is much higher, then inventory becomes tighter, increasing prices. If the ratio is much lower, the inventory becomes looser, which leads to lower prices.
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Real estate agents use the SNLR to know if it is a buyer or seller’s market. If the SNLR is more than 60%, the industry considers it a seller’s market.
Ever since the pandemic began, only three markets in Canada (Hamilton, Kitchener, and Calgary) saw an increase in sales faster than inventory. Hamilton (SNLR of 81%, up to 17.2% since February), Kitchener (76.2%, up 24.5% since February), Calgary (SNLR of 53.3%, up 1.5% since February.)
Canada’s real-estate market now in full swing after lock-down restriction
The June and July sales figures broke records set a year earlier after the emergency lockdown restrictions started to relax. The real estate market in Canada is back in full swing.
The Toronto market spread its heat to the suburban and rural markets. The whole country now sees properties selling with lots of offers after hitting the market.
There may be tons of factors that caused the increase in demand. It could be the fundamental changes in customers’ appetites or high wants for more space and more land. It could probably be because all along, we haven’t appreciated the level of demand.
Before now, only three real-estate markets in Canada experienced sales much higher. But three weeks into September, there currently are talks of a “balanced market” in which demand and supply are in equilibrium. This isn’t something that was expected, though some great houses are selling for less for no discernible reason. But all-in-all, the real-estate market has flipped.
The condo markets across Canada are seeing a significant rise in sales and have experienced a strong seller’s call after the pandemic cooled things down. Experts expect the trend to go higher as markets reopen.