Review of June sales in Toronto and Vancouver reveals a tale of cautious buyers and eager sellers
By Murtaza Haider and Stephen Moranis
Average housing prices are frequently influenced by extreme values and do not account for variations in the type, quality, and size of homes sold over time. The MLS House Price Index (HPI) addresses these limitations by providing an estimate that controls for differences in size, quality, and other attributes.
The Composite MLS HPI, which covers all property types, was down by 4.6 per cent year-over-year for Greater Toronto. A comparison of regional markets within Greater Toronto revealed that the HPI declined less in the City of Toronto than in the populous suburban regions of Durham, Halton, Peel and York.
The HPI for apartments (condominiums) showed a larger year-over-year decline of 4.7 per cent in June compared to other property types. Since condo sales are more prevalent in the City of Toronto, Toronto’s regional HPI was weighed down by the 5.1 per cent decline in the city.
The decline in sales contrasts with the increase in supply in Vancouver. About 14,182 dwellings were listed in June, a 42 per cent increase over June 2023. Current listings are more than 20 per cent higher than the 10-year average. These statistics suggest a buyer-friendly market, with the sales-to-active listings ratio down to 17.6 per cent in Vancouver.
Interestingly, the MLS HPI for all property types in Vancouver in June 2024 was slightly higher than the same time last year. Over three years, the HPI in June 2024 showed a double-digit increase in most local markets within Greater Vancouver, except for West Vancouver, which saw a decline of 1.7 per cent.
The large increase in listings indicates that sellers may need to offload properties that have become too expensive to carry due to higher monthly mortgage payments.
Leading economists and most homebuyers expect further interest rate cuts this year. Since housing prices are still below their long-term expected average values, waiting for lower mortgage rates makes strategic sense for most buyers.
For those who prefer to buy now and avoid the rush of buyers later, which often leads to bidding wars, a prudent approach would be to opt for a variable-rate mortgage and switch to a fixed later when mortgage rates decline.