The Canadian housing market showed little change in March 2024, with home sales and prices remaining mostly flat. Sales activity recorded through Canadian MLS systems edged up by 0.5 percent month-over-month but remained below the average of the last 10 years. 

The national composite MLS Home Price Index (HPI) also remained mostly unchanged, dipping by 0.3 percent month-over-month. The report suggests that while there are expectations of a market pick-up this year, the current situation could be influenced by high interest rates and the anticipation of rate cuts.

Canadian consumers are tapped out but buyer’s market potentially on horizon

We’d say it’s more likely this flat market behaviour indicates that the Canadian consumer is tapped out, and with housing at record unaffordability, it’s unlikely we’ll see much growth until affordability returns to the market.

Affordability is a function of price, interest rates and income. According to Bloomberg, to reach pre-COVID affordability in Canada, prices would need to come down 33 percent, incomes would need to rise 55 percent or interest rates would need to fall 350 basis points. 

It’s likely that some combination of these three factors will eventually create a recovery in the Canadian real estate market. 

The data suggests buyers might respond positively to the increase in new properties for sale, which would reduce some excess demand and potentially create a buyer’s market, allowing for negative price discovery to take place. The full impact will be clearer with the release of April’s data.

Transactions

The unadjusted transaction count for March 2023 exhibited a 1.7 percent increase compared to the previous month. This growth was relatively modest when juxtaposed with the preceding two months’ performances. Apparently, the Easter weekend’s sluggish market conditions can be blamed for this subdued growth.

However, when looking at the inability of monthly home sales to return to their 10-year average, it tells us that unaffordability and economic factors are clearly preventing Canadians from buying homes the way they have in the past:

Price

Price activity seemed comparably underwhelming, with prices moving sideways (slightly downward) during the spring market of February and March — two months they almost always move up:

The biggest increases in price were observed in the following locations.

1. Greater Moncton: +5 percent

2. Estrie, Quebec: +3.5 percent

3. Prince Edward Island: +2.7 percent

4. Sault Ste. Marie, Ontario: +2 percent

5. Chilliwack, British Columbia: +1.9 percent

The biggest decreases in price were observed in these locations.

1. Simcoe & District, Ont.: -2.3 percent

2. Mauricie, Que.: -3 percent

3. Halifax: -1.7 percent 

4. B.C.’s Interior region: -1.6 percent

5. Owen Sound, Ont.: -1.2 percent

 

CREA’s 2024 forecast

The Canadian Real Estate Association (CREA) released its quarterly forecast, which indicates a return to the 10-year average sales volume growth trajectory by 2025.

CREA expects interest rates to remain a key factor influencing Canadian housing markets through 2024 and 2025. The market has been noticeably quiet since the Bank of Canada’s rate hikes in 2023, with prices in many markets still well below their historic peaks seen in 2021 and 2022.

Source: CREA

Expectations suggest the first rate cut in 2024 may occur in the second half of the year, with financial markets predicting around 50 basis points of cuts by the end of 2024. Most economists seem to believe that Canada won’t cut until the United States Federal Reserve cuts, which we may not see this year if it doesn’t happen at the next Federal Open Market Committee meeting. 

CREA’s statistics show a bounce in new supply, sales and listings, suggesting the market may be gearing up for a recovery. Around 492,083 residential properties are projected to trade in 2024, a 10.5 percent increase from 2023. The national average home price is forecast to increase by 4.9 percent to $710,468 in 2024.

In 2025, national home sales are expected to climb by 7.8 percent to 530,494 units, while the national average home price is projected to rise by 7 percent to $760,120.

Increases in volume

CREA’s 2024 forecast shows the biggest increase in number of homes sold to take place in:

• Alberta, by 13.6 percent

• Nova Scotia, by 12.7 percent

• Ontario, by 12.6 percent 

• Quebec, by 11 percent

Source: CREA

Increases in price

CREA’s 2024 forecast expects the biggest increase in home prices to be seen in:

• Alberta, by 7 percent to $479,765

• British Columbia, by 6.9 percent to $1,037,382

• Nova Scotia, by 6.7 percent to $451,114

• Quebec, by 5.9 percent to $515,877

Source: CREA

Courtesy REM Magazine, CREA

A public hearing on a proposed bylaw that could change the urban landscape of Calgary starts on Monday when citizens head to council chambers to voice their opinions about a possible citywide zoning change.

The rezoning proposal is a key part of the city's housing strategy, something the city says is an important measure to address housing supply and affordability.

If passed, the bylaw would allow for different housing types, such as six-plexes and townhomes, to be built in neighbourhoods that currently only allow single-family homes.

It's been a hotly debated topic that included an attempt at a plebiscite, separate community meetings with city councillors, a highly-criticized citizen engagement plan and a letter opposing the proposal signed by more than 40 Calgary community association presidents.

In an interview on CBC Calgary's This is Calgary podcast, host Anis Heydari spoke with Chris Welner, the Glendale community association president, about why he thinks rezoning is not the right path.

He was one of those who signed the letter.

City council is about to decide if it wants to make it simpler to knock down a bungalow and build a row house. This could help ease the affordability crunch, and could lead to neighbourhoods that don't look like they were intended to. With emotion on all sides, we hear from a community opposed, and why the city says it's time to get cozy with this blanket.

"I think blanket zoning is really a blunt sledgehammer," said Welner.

"We 100 percent support density development, but it's got to be done properly. It can't just be 'open up the doors to a developer who wants to build on anywhere they want, under any circumstances.'"

According to the City of Calgary, rezoning happens when a property owner wants to develop something other than what's currently allowed under existing zoning. 

"Council makes the final decision on whether to approve or refuse a rezoning application after a public hearing," the city said on its website.

If the rezoning is approved by council, the applicant can submit a development permit application. Depending on the location of the property, development and building permits might still be required — and building permits are always required for new homes.

Speaking on This is Calgary, Josh White, Calgary's director of city and regional planning, said the citywide rezoning proposal is a necessary step toward solving the ongoing housing problems the city faces.

As it stands, White said, around two-thirds of the city's land base is only zoned for single-detached homes and no change can happen. If you want to replace a single-detached home, you'd only be able to do build another house of the same type.

"We've seen rapid rise in rent and price across the city," White said.

"What that [rezoning] does is allow more diversity of housing, so, different varieties of housing to boost our housing supply and provide housing that's more within the reach of more Calgarians."

The proposed citywide rezoning is one of a number of strategies that the city is pursuing. 

While the proposal may be a solution for one problem, Welner worries that in solving this issue, others will come up.

"Calgary is a great city to live in, it's truly a great place. Are there issues, are there problems, absolutely," he said.

"But blanket zoning is going to open up an amazing wealth transfer to developers who have the wherewithal to come in, buy up the house that's probably a little bit run down that's next to you and put up anything."

The citywide rezoning public hearing starts Monday with a decision on the bylaw to come in the following weeks.

Courtesy CBC News

A public hearing on a proposed bylaw that could change the urban landscape of Calgary starts on Monday when citizens head to council chambers to voice their opinions about a possible citywide zoning change.

The rezoning proposal is a key part of the city's housing strategy, something the city says is an important measure to address housing supply and affordability.

If passed, the bylaw would allow for different housing types, such as six-plexes and townhomes, to be built in neighbourhoods that currently only allow single-family homes.

It's been a hotly debated topic that included an attempt at a plebiscite, separate community meetings with city councillors, a highly-criticized citizen engagement plan and a letter opposing the proposal signed by more than 40 Calgary community association presidents.

In an interview on CBC Calgary's This is Calgary podcast, host Anis Heydari spoke with Chris Welner, the Glendale community association president, about why he thinks rezoning is not the right path.

He was one of those who signed the letter.

LISTEN | Glendale Community Association President Chris Welner says "a more surgical approach" would be a better approach to tackle Calgary's housing crisis:

"I think blanket zoning is really a blunt sledgehammer," said Welner.

"We 100 per cent support density development, but it's got to be done properly. It can't just be 'open up the doors to a developer who wants to build on anywhere they want, under any circumstances.'"

According to the City of Calgary, rezoning happens when a property owner wants to develop something other than what's currently allowed under existing zoning. 

"Council makes the final decision on whether to approve or refuse a rezoning application after a public hearing," the city said on its website.

If the rezoning is approved by council, the applicant can submit a development permit application. Depending on the location of the property, development and building permits might still be required — and building permits are always required for new homes.

Speaking on This is Calgary, Josh White, Calgary's director of city and regional planning, said the citywide rezoning proposal is a necessary step toward solving the ongoing housing problems the city faces.

As it stands, White said, around two-thirds of the city's land base is only zoned for single-detached homes and no change can happen. If you want to replace a single-detached home, you'd only be able to do build another house of the same type.

"We've seen rapid rise in rent and price across the city," White said.

"What that [rezoning] does is allow more diversity of housing, so, different varieties of housing to boost our housing supply and provide housing that's more within the reach of more Calgarians."

The proposed citywide rezoning is one of a number of strategies that the city is pursuing. 

While the proposal may be a solution for one problem, Welner worries that in solving this issue, others will come up.

"Calgary is a great city to live in, it's truly a great place. Are there issues, are there problems, absolutely," he said.

"But blanket zoning is going to open up an amazing wealth transfer to developers who have the wherewithal to come in, buy up the house that's probably a little bit run down that's next to you and put up anything."

The citywide rezoning public hearing starts Monday with a decision on the bylaw to come the following weeks.

The Bank of Canada today held its target for the overnight rate at 5%, with the Bank Rate at 5¼% and the deposit rate at 5%. The Bank is continuing its policy of quantitative tightening.

The Bank expects the global economy to continue growing at a rate of about 3%, with inflation in most advanced economies easing gradually. The US economy has again proven stronger than anticipated, buoyed by resilient consumption and robust business and government spending. US GDP growth is expected to slow in the second half of this year, but remain stronger than forecast in January. The euro area is projected to gradually recover from current weak growth. Global oil prices have moved up, averaging about $5 higher than assumed in the January Monetary Policy Report (MPR). Since January, bond yields have increased but, with narrower corporate credit spreads and sharply higher equity markets, overall financial conditions have eased.

The Bank has revised up its forecast for global GDP growth to 2¾% in 2024 and about 3% in 2025 and 2026. Inflation continues to slow across most advanced economies, although progress will likely be bumpy. Inflation rates are projected to reach central bank targets in 2025.

In Canada, economic growth stalled in the second half of last year and the economy moved into excess supply. A broad range of indicators suggest that labour market conditions continue to ease. Employment has been growing more slowly than the working-age population and the unemployment rate has risen gradually, reaching 6.1% in March. There are some recent signs that wage pressures are moderating.

Economic growth is forecast to pick up in 2024. This largely reflects both strong population growth and a recovery in spending by households. Residential investment is strengthening, responding to continued robust demand for housing. The contribution to growth from spending by governments has also increased. Business investment is projected to recover gradually after considerable weakness in the second half of last year. The Bank expects exports to continue to grow solidly through 2024.

Overall, the Bank forecasts GDP growth of 1.5% in 2024, 2.2% in 2025, and 1.9% in 2026. The strengthening economy will gradually absorb excess supply through 2025 and into 2026.

CPI inflation slowed to 2.8% in February, with easing in price pressures becoming more broad-based across goods and services. However, shelter price inflation is still very elevated, driven by growth in rent and mortgage interest costs. Core measures of inflation, which had been running around 3½%, slowed to just over 3% in February, and 3-month annualized rates are suggesting downward momentum. The Bank expects CPI inflation to be close to 3% during the first half of this year, move below 2½% in the second half, and reach the 2% inflation target in 2025.

Based on the outlook, Governing Council decided to hold the policy rate at 5% and to continue to normalize the Bank’s balance sheet. While inflation is still too high and risks remain, CPI and core inflation have eased further in recent months. The Council will be looking for evidence that this downward momentum is sustained. Governing Council is particularly watching the evolution of core inflation, and continues to focus on the balance between demand and supply in the economy, inflation expectations, wage growth, and corporate pricing behaviour. The Bank remains resolute in its commitment to restoring price stability for Canadians.

Information note

The next scheduled date for announcing the overnight rate target is June 5, 2024. The Bank will publish its next full outlook for the economy and inflation, including risks to the projection, in the MPR on July 24, 2024.

Courtesy Bank of Canada

The RE/MAX International conference took place last week in Las Vegas, the Viani Real Estate Group was honoured to be recognized among some of the top-producing REALTORS® in the entire RE/MAX network. 
 
The Viani Real Estate Group was recognized as a Diamond Team for 2023

This distinction was only achieved by four teams at RE/MAX Real Estate (Central), in addition, the Viani Real Estate Group ranked as the 54th top-producing team in all of RE/MAX Western Canada an area which spans from Manitoba to British Columbia.

The Viani Real Estate Group helped over 140 friends, families, businesses and investors achieve their real estate goals in 2023. Through the diverse skill set of our group, we were able to assist clients with their residential, commercial and rural needs. 

In addition, RE/MAX Real Estate (Central) was recognized as the #1 RE/MAX office worldwide for the 26th year, the Viani Real Estate Group congratulates RE/MAX Real Estate (Central) and is proud to be associated with such an outstanding office.

Individually the group members were recognized with the following RE/MAX awards;
- Alison Lang | Platinum Club
- Nga Jenna Nguyen | 100% Club
- Tom Armstrong | 100% Club
- Greg Keogh | Executive Club

Thank you to all of our clients, those who referred clients to us and to our families for their continued support, without each of you we could not achieve such success.

Contact us today to put our award-winning service to work for you.

Best Wishes
www.vianigroup.com
Viani | Lang | Nguyen | Armstrong | Keogh

MARCH 2024 HOUSING MARKET UPDATE

April 1, 2024

March reflects strong seller's market and price increases

March sales rose to 2,664 units, a 10 per cent year-over-year gain and much higher than long-term trends. While new listings did pick up over last month, the 3,172 units were still below what we typically see in March and not enough relative to sales to drive any change in the supply situation. In March, the sales-to-new listings ratio rose to 84 per cent, and the months of supply fell below one month. 

“We have not seen March conditions this tight since 2006, which is also the last time we reported high levels of interprovincial migration and a months-of-supply below one month," said Ann-Marie Lurie, Chief Economist at CREB®. “Moreover, we are entering the third consecutive year of a market favouring the seller as the two-year spike in migration has driven up demand and contributed to the drop in re-sale and rental supply. Given supply adjustments take time, it is not a surprise that we continue to see upward pressure on home prices.” 

Inventory levels have declined across properties priced below $1,000,000, with the steepest declines occurring for homes priced below $500,000. In March, there were 2,532 units in inventory, 22 per cent lower than last year and half the levels we traditionally see in March.

In March, the unadjusted total residential benchmark price rose to $597,600, a two per cent gain over last month and nearly 11 per cent higher than last year. Prices have increased across all property types, with the most significant year-over-year gains occurring for the relatively more affordable row and apartment-style homes.   

Detached

Detached home sales rose in March but were likely limited by the level of new listings coming onto the market. New listings in March were 1,386 units, compared to the 1,151 sales, causing the sales-to-new listings ratio to rise to 83 per cent. Inventories also remained relatively stable compared to last month but were 24 per cent lower than last year’s levels and nearly 60 per cent lower than long-term trends for March. Inventory levels dropped across all price ranges, but the most significant fall was in the lower price point. Overall, 71 per cent of the available inventory in March was priced above $700,000.

 

Low inventories compared to sales caused the months of supply to drop below one month, driving further price gains. The unadjusted detached benchmark price rose to $739,700, a monthly gain of nearly three per cent and a year-over-year gain of 14 per cent. The largest year-over-year gains occurred in the most affordable North East and East districts.

 

Semi-Detached

Supply availability continues to weigh on the semi-detached sector of the market. In March, 260 new listings were met with 250 sales, causing the sale-to-new listings ratio to rise to 96 per cent. This prevented inventories from improving, and the months of supply dropped below one month. Inventory declines have been driven mainly by properties priced below $600,000.

 

Limited supply and growing demand drove further price gains in March. The unadjusted benchmark price reached $658,000, nearly three per cent higher than last month and a 14 per cent gain over last March. Prices rose across all districts in the city, with year-over-year gains ranging from a low of 11 per cent in the highest-priced area of the City Centre to 25 per cent in the lowest-priced market in the East district.

 

Row

Both sales and new listings rose in March. However, with 536 new listings and 449 sales, the sales-to-new listings ratio rose to 84 per cent, preventing any significant monthly change in inventory levels. With 355 units available, inventory levels were 12 per cent below last year’s and 53 per cent below long-term trends for March. The decline in inventory levels was driven by properties priced below $400,000, as inventory levels rose 35 per cent for units priced above $400,000.

 

The unadjusted benchmark price trended up in March, reaching $448,700, a monthly gain of nearly three per cent and over 20 per cent higher than levels reported at this time last year. The higher-priced City Centre reported the slowest growth in benchmark prices, with the highest growth reported in the city's most affordable districts.

 

Apartment Condominium

Sales in March reached 814 units, contributing to the first quarter’s record-high sales of 1,940 units, nearly 31 per cent higher than last year. New listings also improved throughout the first three months of the year, but with a March sales-to-new-listings ratio of 82 per cent and a months-of-supply of one month, conditions favoured apartment condominium sellers.

 

Demand for lower-priced homes has supported the growth of apartment-style properties, but the tight conditions have also contributed to further price gains. In March, the benchmark prices reached $337,700, over two per cent higher than last month and 17 per cent higher than levels reported last March.

 REGIONAL MARKET FACTS

Airdrie

March reported 203 sales and 218 new listings. While both new listings and sales improved, with a sales-to-new listings ratio of 93 per cent, inventory levels were 22 per cent below last year and 56 per cent below typical March levels.

 

With less than one month of supply, it is not surprising that we continue to see upward pressure on home prices. In March, the benchmark price reached $540,400, a monthly gain of two per cent and a year-over-year increase of over nine per cent. Prices improved across all property types, with stronger year-over-year gains for the relatively lower-priced row and apartment-style products.

 

Cochrane

Following a slower start to the year, sales in March rose to nearly the same level of new listings coming onto the market, pushing the sales-to-new listings ratio up to 99 per cent. This also contributed to further declines in inventory levels, and the months of supply dropped to just over one month.

 

As of March, the total residential benchmark price reached $555,300, a monthly gain of over one per cent and a year-over-year increase of nearly 12 per cent. Prices rose across all property types, and detached prices pushed above $650,000 for the first time.

 

Okotoks

Okotoks continues to struggle with supply as the 71 new listings that came on the market this month were met with 65 sales, preventing any improvement in inventory levels. There were only 54 units available in March, a year-over-year decline of 10 per cent and nearly 70 per cent below long-term trends for the month.

 

Limited supply and strong sales caused the months of supply to fall below one month, and March was the lowest March reported since 2006. Persistently tight conditions drove further price growth this month, as the total residential benchmark price rose to $610,700, a monthly gain of one per cent and a year-over-year increase of nine per cent. Prices have been rising for all property types, with the most significant year-over-year gains occurring for semi-detached and row properties. 

 

Click here to view the full City of Calgary monthly stats package.

Click here to view the full Calgary region monthly stats package.