Vancouver Canadian Real Estate Prices To Fall Up To 26%, Bay Street Firm Warns Institutions

Canadian Real Estate Prices To Fall Up To 26%, Bay Street Firm Warns Institutions

Canadian real estate prices may take a big tumble, Bay Street researchers warn. Veritas Investment Research, a prominent Canadian firm, sent institutional clients a real estate forecast. The firm warned real estate price declines are unlikely, except in the event of supply shock. They now believe supply shock may arrive soon, and can send prices up to 26% lower.

About The Numbers

Veritas’ analysis is geared to investment managers, so it’s different from a bank forecast. The firm used regression analysis in its conclusion with various risk scenarios. They concluded months of inventory has the highest correlation with prices. Recently, the market has been tight, sending prices higher during a recession. They believe that’s about to change when mortgage deferrals expire, and things get back to “normal.” 

The firm’s model is based on a percent of mortgage payment deferrals turning into inventory. They gave scenarios for 5%, 10%, or 15% of homeowners with deferrals turning into sellers. This isn’t the same as assuming they’ll default. While some people will default, you typically never default if you can sell first. Canada’s tight housing supply means most people can do that, instead of defaulting. This is a point the CMHC has recently made as well, so it’s not an outlandish assumption. It’s actually an ideal scenario.  

We should also first add, they warned clients about the uncertainty during the pandemic. Since pretty much nothing has been predictable, they’re advising clients to watch the months of inventory closely. In other words, do your own due diligence, but this is what they’re watching for and expect at this time. 

Canadian Real Estate Prices To Drop Up To 11%

Canadian real estate prices are expected to make modest to substantial declines. The firm’s model suggests potential price declines between 4 and 11 percent. As stated before, this is based on the assumption inventory will rise as a result of deferrals turning into listings. This doesn’t include additional supply, which Canada is currently building records amounts of, and is often flipped back into resale markets. 

Toronto Real Estate Prices May Drop Up To 26%

Toronto real estate has the largest dive in the forecast. The firm expects a potential price drop between 15 and 26 percent. For the regional models, they assumed a distribution of deferrals was similar to that of all real estate markets. However, CMHC deferral data shows Toronto may be overrepresented in the deferrals

Vancouver Real Estate Prices To Drop Up To 17%

Vancouver real estate’s prices are forecasted to make a smaller drop than Toronto. The firm sees a potential price drop between 10 and 17 percent. They are once again assuming a proportional distribution of deferrals. Worth mentioning, the CMHC also forecasted smaller price declines for Vancouver as well. However, their numbers didn’t show as quick of a recovery for prices as Toronto. 

The firm expects this price movement around six months after the inventory increase. The timeline puts it fairly close to when the CMHC has been forecasting. The forecast is a little more aggressive than those of banks and other vested interests. However, it’s similar to what other institutional risk advisory firms have forecasted. It’s also similar to Canada’s state-backed mortgage insurer. 

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Co-Founder and chief data nerd at Better Dwelling. Named a top influencer in finance and risk by Thomson-Reuters.

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CANADA

CRA: 800,000 Ineligible People Did Not Get CERB, But They’re Checking Applications

Canada’s national tax agency clarified a major news organization’s allegations of CERB “ineligibility” is, well… not entirely accurate. The Canada Revenue Agency (CRA)  responded to our request for clarification on tax-filer application data yesterday. CRA spokesperson Pamela Tourigny didn’t just clarify the data, but also generously provided their take on CERB fraud, and how they plan on dealing with it. 

No, 800,000 Canadians Didn’t Collect CERB While Ineligible 

Despite the rumors started by a major news organization, the data doesn’t show hundreds of thousands of ineligible CERB claims. This mistake was due to people interpreting 800,000 claims without taxes filed in 2019, as ineligible. Like we pointed out when breaking down the impact to income flow, unfiled 2019 taxes didn’t necessarily mean applicants are ineligible. It just meant the data wasn’t ready, and will need verification later.  

“For the emergency benefits, there is no requirement for individuals to have filed a tax return. As such, it would be erroneous to conclude that claims from applicants who have not filed a tax return are being paid out to fraudsters or to non-eligible individuals. Income eligibility for Canada Emergency Response Benefit (CERB) is determined based on an individual having earned a minimum of $5,000 (before taxes) in the last 12 months, or in 2019 from one of the following sources: employment, self-employment or provincial benefit payments related to maternity or paternity leave.”

The CRA Will Verify CERB Eligibility Next Tax Season

It would be naive to say some Canadians didn’t cheat the system. It’s a fact some people cheated to get CERB. However, it’s a little more difficult to know if they intentionally did it, or it was accidental. The CRA won’t have the full data to verify these circumstances until the end of this tax year. They mention they’ll be verifying this information during the next tax season. 

“…we will take steps at a later time to verify that claimants were eligible to receive payments for any COVID-related economic measures. The CRA has records of those who received the CERB and for what period. These will be used, along with tax slips received from employers and other relevant information available to the CRA, to validate eligibility next tax filing season. Where eligibility is in question, a review will be conducted to ensure that recipients were only paid amounts they were entitled to.” 

No, Repayment Won’t Be An Unfair Burden On Low Income Households

The other concern frequently circulating is low income Canadians found to be ineligible, will be punished. That’s not exactly the case. If the CRA finds people were ineligible, they plan on working with them to create a repayment plan based on their income. In this case, the economy essentially used a pull-forward mechanism on consumer spending. For those that refuse to repay if found ineligible, the agency claims they may take further legal action. Below is the statement from the CRA: 

“The CRA is sensitive to the hardship of Canadians still facing the financial impacts of COVID-19. The payment arrangement parameters have been expanded to give Canadians more time and flexibility to repay based on their ability to pay. If an individual is unable to repay ineligible CERB amounts, we will evaluate their situation and follow-up when their financial circumstances change. Canadians who applied for the CERB in good faith, and later determined they were ineligible will be required to pay money back without penalties or interest. For situations when an individual has the capacity to pay and refuses to reach a mutually acceptable payment arrangement, the CRA may take legal action.”

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Canada Saw Tens Of Thousands Of Six-Figure Earners Apply For Emergency Income

Canada’s emergency benefit applications are giving a little more insight into income disruption. Canada Revenue Agency data presented to the House of Commons shows a breakdown of CERB applicant income from last year. The data, first reported by Blacklock’s Reporter, shows hundreds of thousands of applicants didn’t file taxes at the time of application. More interesting though, is the number of high income applicants. Tens of thousands of CERB applicants made six-figures last year. This shows an altered income pattern for many of Canada’s top earners.

Why Is This Important?

Today we’re looking at CERB applicants by income reported in tax filings the previous year. For non-Canadians, the Canada Emergency Response Benefit (CERB) was a $2,000 monthly emergency payment, given to people with pandemic related income losses. This is a similar amount made by many low income Canadians. However, it’s a lot lower than the income made by thousands of people that applied.

Somewhat surprising, is that tens of thousands of relatively high income Canadians applied for CERB. Now, this isn’t a rich bashing piece to say they didn’t need it. This tells us about a disruption in income, or a delay some Canadians made paying themselves. This will alter, delay, or eliminate consumer consumption. If the losses are semi-permanent, then this buying power disappears from the economy. If it was just delayed or paused, it explains why we’re seeing income catapult so quickly again, and should expect a consumption boom. This data point further adds to the excess savings trend we discussed yesterday. 

Over 128,000 Applicants Made 6-Figures A Year Before

Tens of thousands of Canadians that applied for the pandemic income, made over six figures. Even more had income just below that mark. CRA data shows 90,720 people applied for CERB that had an income between $93,259 to $147,667 in 2019. Another 23,900 applicants filed taxes that showed they made between $147,667 and $210,371 last year. In the highest disclosed bracket, 14,070 applied for CERB that made over $210,371 last year. If all approved, this would be between $209.58 million to $1.26 billion of benefits consumed by this demographic.

Canadian CERB Applicants By 2019 Tax Bracket

The number of CERB applicants by 2019 tax bracket, including those that have not filed 2019 taxes.
 
Source: CRA, Blacklock’s Reporter, Better Dwelling.

The largest pool of applicants was relatively low income. The majority, 3,844,090 applicants, made less than $47,630 the year before applying. This represents about 71.45% of the applicants. In some instances, low income households may have made more on CERB. However, there may be cases where they had their income cut in half as well. 

The Second Largest Demographic Is Completely Unknown

Another interesting observation in the data is the second largest segment of applicants didn’t file taxes. There were 823,580 CERB applicants who did not file 2019 taxes at the time of application. The read on that is a little more mixed in my opinion. It doesn’t mean they weren’t automatically ineligible. The income tax filing deadline was pushed to September 30, the day these numbers were tallied. Further, the criteria reads: 

“Who had employment and/or self-employment income of at least $5,000 in 2019 or in the 12 months prior to the date of their application” 

This makes the takeaway a little less obvious. There’s no doubt a number of people that didn’t technically qualify for CERB, took it anyway. There are also a number of people that may have been late on taxes, or earned the $5,000 minimum in 2020. These people would have still been eligible. Basically, not even the government is sure how this will change spending patterns.

Households that didn’t need CERB, but qualified and took it anyway, helps explain the savings glut. Without an income cap on  benefits, the cash just helped pad savings accounts. The bad news is, high income households just received a subsidized cheque. The good news is they’ll probably spend that money in the economy when it reopens.

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Co-Founder and chief data nerd at Better Dwelling. Named a top influencer in finance and risk by Thomson-Reuters.

5 COMMENTS

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  • REPLY
    Ken20 HOURS AGO

    I received a CERB check, it was automatically given when I applied for employment insurance benefits. I will probably have to return all of the money at tax time next year (I made too much). So, even tho my bank account has grown in size, it won’t be oversized for very long.

  • REPLY
    Chad LIdstone7 HOURS AGO

    who do you think have homes, mortgages, kids, car payments etc. They of course have huge amounts of bills and cerb didnt probably cover half of it. Frankly the fact that it is even news worthy id disgusting to me. They probably paid taxes and ei their whole lives and didnt collect any benefits now you make it out to be an outrage. absolutely atrocious.

    • REPLY
      Trader Jim7 HOURS AGO

      This is why there needs to be a skill testing question to read economics blogs.

      If CERB was half the money they normally made, they have half the money they would have in the previous year. This means half the amount of GDP generated, and a loss to economic capacity, as the author literally pointed out, while also pointing out they are not making the point you just made.

      No one cares that you’re on welfare. Get over yourself.

    • REPLY
      John Nash6 HOURS AGO

      Well Chad,

      Youre ‘disgusted’ are you? If you make 6 figures and DONT have any money saved, thats too bad. Paying YOUR bills of a luxury lifestyle isn’t MY problem.

      You’ve had it good for so long that youve become entitled? grow up you selfish goof

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CANADA

CIBC: Canadians Have $90 Billion In Excess Cash, As Government Doubles Income Lost

Canadian households are sitting on a record amount of cash, waiting to be spent. CIBC Economics’ latest report shows tens of billions in cash just sitting in accounts in Q2 2020. The increase is due to a combination of government supports, lack of places to spend, and payment deferrals.

Canadian Households Saved $90 Billion More Than Expected

Canadians are holding onto an astronomical amount of cash in their bank accounts. CIBC estimates households have saved $90 billion more than typical in Q2 2020. They estimate the amount to be equivalent to 4% of consumer spending. So suddenly everyone’s a great saver, in a country with notoriously high household debt? Not exactly.

Government Transfers Equal $2.25 For Each Dollar Of Income Lost

The bank believes this is largely due to government transfers. The lost income fell $100 billion seasonally adjusted at the annual rate (SAAR) for Q2 2020. This was matched with government transfers from programs like CERB, that add up to $225 billion SAAR. To put it bluntly, the government replaced every $1 of income lost, with $2.25 in the quarter. An unprecedented event for a recession. 

Canada’s Household Savings Rate Hits 28%

Combine the higher income delivery with restricted spending, and mortgage deferrals – and you get a lot of cash. Prior to the pandemic, the saving’s rate had reached 3.6% – already a worrying climb. During the pandemic, it escalated to as high as 28.2% in June. In periods of recession, savings rates tend to jump as people worry. When most places are shut down, it becomes pretty hard to spend, even if you try.

Canadian Household Savings Rate

The seasoanlly adjusted rate of household savings.

Q1 1961Q1 1963Q1 1965Q1 1967Q1 1969Q1 1971Q1 1973Q1 1975Q1 1977Q1 1979Q1 1981Q1 1983Q1 1985Q1 1987Q1 1989Q1 1991Q1 1993Q1 1995Q1 1997Q1 1999Q1 2001Q1 2003Q1 2005Q1 2007Q1 2009Q1 2011Q1 2013Q1 2015Q1 2017Q1 2019051015202530Percent
QuarterPercent
Q1 1961 1.3
Q2 1961 0.4
Q3 1961 1.1
Q4 1961 2.1
Q1 1962 3.7
Q2 1962 3
Q3 1962 4.6
Q4 1962 3.6
Q1 1963 4.7
Q2 1963 3.7
Q3 1963 3.4
Q4 1963 4.1
Q1 1964 3.9
Q2 1964 3.3
Q3 1964 3
Q4 1964 3.1
Q1 1965 5.7
Q2 1965 3.3
Q3 1965 4.7
Q4 1965 4.8
Q1 1966 6.2
Q2 1966 6.8
Q3 1966 5.8
Q4 1966 6.6
Q1 1967 5.9
Q2 1967 6.1
Q3 1967 6
Q4 1967 4.7
Q1 1968 3.2
Q2 1968 5.7
Q3 1968 4.3
Q4 1968 4
Q1 1969 4.5
Q2 1969 3.6
Q3 1969 4.7
Q4 1969 4.3
Q1 1970 6.6
Q2 1970 4.2
Q3 1970 5
Q4 1970 5.5
Q1 1971 7.9
Q2 1971 5.6
Q3 1971 5.5
Q4 1971 5.2
Q1 1972 7.9
Q2 1972 7.2
Q3 1972 7.5
Q4 1972 8.5
Q1 1973 7.7
Q2 1973 9.3
Q3 1973 10.2
Q4 1973 11.7
Q1 1974 11.2
Q2 1974 8.9
Q3 1974 11.9
Q4 1974 13.8
Q1 1975 12.1
Q2 1975 12.8
Q3 1975 13.2
Q4 1975 12
Q1 1976 12.8
Q2 1976 13.6
Q3 1976 10.7
Q4 1976 11.8
Q1 1977 11.2
Q2 1977 13.4
Q3 1977 10.9
Q4 1977 11.4
Q1 1978 13.7
Q2 1978 12.8
Q3 1978 12.1
Q4 1978 12.6
Q1 1979 11.6
Q2 1979 14.1
Q3 1979 13.2
Q4 1979 14.4
Q1 1980 14.1
Q2 1980 14.9
Q3 1980 13.9
Q4 1980 14.9
Q1 1981 16.4
Q2 1981 17.3
Q3 1981 17.8
Q4 1981 18.2
Q1 1982 21.6
Q2 1982 21.3
Q3 1982 20.2
Q4 1982 18.6
Q1 1983 16.6
Q2 1983 14.7
Q3 1983 18.7
Q4 1983 15.7
Q1 1984 14.6
Q2 1984 17
Q3 1984 17.7
Q4 1984 17.1
Q1 1985 15.8
Q2 1985 17.6
Q3 1985 14.6
Q4 1985 14.3
Q1 1986 14
Q2 1986 14
Q3 1986 12
Q4 1986 12.3
Q1 1987 12.5
Q2 1987 11
Q3 1987 11.3
Q4 1987 11
Q1 1988 10
Q2 1988 11.5
Q3 1988 13
Q4 1988 13.2
Q1 1989 13.5
Q2 1989 12.8
Q3 1989 12.1
Q4 1989 12.2
Q1 1990 13.1
Q2 1990 11.4
Q3 1990 13.1
Q4 1990 13.9
Q1 1991 14.8
Q2 1991 11.6
Q3 1991 12.7
Q4 1991 13.1
Q1 1992 12
Q2 1992 13
Q3 1992 14.6
Q4 1992 12.2
Q1 1993 12.3
Q2 1993 15.4
Q3 1993 11.7
Q4 1993 10.4
Q1 1994 10.3
Q2 1994 11
Q3 1994 10
Q4 1994 9.6
Q1 1995 10
Q2 1995 9.8
Q3 1995 8.7
Q4 1995 8.9
Q1 1996 7.6
Q2 1996 7.2
Q3 1996 6.9
Q4 1996 5.6
Q1 1997 4.5
Q2 1997 4.3
Q3 1997 4.9
Q4 1997 3.7
Q1 1998 4.9
Q2 1998 3.6
Q3 1998 4.6
Q4 1998 5.5
Q1 1999 4.5
Q2 1999 5
Q3 1999 4.6
Q4 1999 4.2
Q1 2000 4.6
Q2 2000 4.6
Q3 2000 4.7
Q4 2000 5.8
Q1 2001 6.5
Q2 2001 2.9
Q3 2001 4.8
Q4 2001 5.1
Q1 2002 5.2
Q2 2002 2.5
Q3 2002 2.7
Q4 2002 2.4
Q1 2003 2.5
Q2 2003 3
Q3 2003 1.2
Q4 2003 2
Q1 2004 1.8
Q2 2004 2.9
Q3 2004 2.6
Q4 2004 2.7
Q1 2005 0.4
Q2 2005 1.3
Q3 2005 2.1
Q4 2005 2.1
Q1 2006 3.1
Q2 2006 1.3
Q3 2006 2.8
Q4 2006 3.5
Q1 2007 4.5
Q2 2007 1.7
Q3 2007 1.3
Q4 2007 1.1
Q1 2008 2.5
Q2 2008 3
Q3 2008 3.1
Q4 2008 5
Q1 2009 4.6
Q2 2009 4.8
Q3 2009 4.8
Q4 2009 4.3
Q1 2010 5.4
Q2 2010 3.7
Q3 2010 3.8
Q4 2010 4.2
Q1 2011 4.5
Q2 2011 4.3
Q3 2011 4.3
Q4 2011 4.3
Q1 2012 4.7
Q2 2012 4.9
Q3 2012 5.4
Q4 2012 5.2
Q1 2013 5.8
Q2 2013 5
Q3 2013 4.8
Q4 2013 4.9
Q1 2014 4.3
Q2 2014 3.9
Q3 2014 3.8
Q4 2014 3.5
Q1 2015 5.6
Q2 2015 5.3
Q3 2015 4.1
Q4 2015 3.1
Q1 2016 0.9
Q2 2016 2.2
Q3 2016 2.3
Q4 2016 2.4
Q1 2017 0.7
Q2 2017 1.9
Q3 2017 3.1
Q4 2017 2.5
Q1 2018 2
Q2 2018 1.9
Q3 2018 1.3
Q4 2018 1.9
Q1 2019 2.3
Q2 2019 3.1
Q3 2019 3
Q4 2019 3.6
Q1 2020 7.6
Q2 2020 28.2
 
Source: Stat Can, Better Dwelling.

A second lockdown is approaching, but another surge of excess capital is unlikely. Programs are now much more targeted, and payment deferrals aren’t raining from the sky. However, this is still a very large capital pool that’s going to need to be deployed in a more efficient manner soon. However, a more important takeaway is there’s households with massive piles of cash waiting to spend, in an economy that has fewer and fewer players by the day.

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Co-Founder and chief data nerd at Better Dwelling. Named a top influencer in finance and risk by Thomson-Reuters.

17 COMMENTS

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  • REPLY
    Simon2 DAYS AGO

    One person’s increase in savings is another person’s decrease in income.

    • REPLY
      OM2 DAYS AGO

      Good way to look at it. Also remember the demographic that saved from their mortgage, doesn’t need a house. It’s just going to be a further wealth gap the government just created.

    • REPLY
      Smaug1 DAY AGO

      But… one person’s savings is also another person’s future income. We need to stop viewing savings as a “leakage”. Safe, secure savings are an important component of long term economic growth. Something we’ve come to ignore with our obsession over “stimulus” and loose monetary policy.

      This store of savings will play an important role in any future economic recovery. If we let it. On the other hand, if we keep interest rates at zero, then much of that savings will end up just being used for down payments, driving house prices up farther. If you can’t get a return on your money in the bank, gambling on real estate comes to be seen as the “safer” alternative.

      • REPLY
        Simon1 DAY AGO

        If I were a restaurant owner, I don’t know why I would care about future income when rent is due now. Give me those savings! And you could prevent savings from going into non-productive sectors by taxing housing at a more progressive rate and creating a real public housing sector.

        I don’t get why savings is important to the economy, when it only means that it’s money that people aren’t spending.

  • REPLY
    Straw Walker2 DAYS AGO

    In most recession cash is seen as king.. and no matter how low interest rates go. Cash is held..
    Why would anyone invest in a business, and more importantly bonds .??

  • REPLY
    Sam2 DAYS AGO

    It sucks for the economy as a whole, but since this website is mainly about housing, one has to wonder if the pile of cash is going to create a run on real state at some point… Maybe next spring/summer when a vaccine is coming and people “think” everything will be back to normal?

  • REPLY
    Rick Hyne2 DAYS AGO

    While many have saved the cash thanks to a very generous government payout designed to help many put food on the table, this generosity coupled with programs at the provincial level and several deferral schemes only deferred the inevitable and created inflation at the same time.

    I am a small business, and like many other small businesses, I have saved the $40,000 just in case.

    $30,000.00 of it will be returned. $10,000.00 will be added to income as per the program unless other options or needs decide otherwise.

    Also, I expect a lot of defaults of the $40,000.00 as businesses close down cash in hand. The money was not secured.

  • REPLY
    Bkl2 DAYS AGO

    The biggest winner from all this are real estate speculators. People who own multiple houses got a huge pay day.

    Let me give you an example, if you are a speculator that has 4 mortgage homes each with 3000 mortgage due per month. With CERB how much did they gain? 2000 CERB per month for 6 month = 12k. 4 deferred mortgages 3000 x 4 house x 6 months = 72k. Just between mortgage deferrals and CERB they net 72k +12k = 84k or 84,000 in 6 months.

    Now if you add house prices increase of 15% of the 4 house at average price of 1 million. 150k x 4 = 600k!

    Whats the conclusion? The government used tax payer money to greatly benefit real estate speculators. This is a horrendous crime against all Canadians. Especially young families who cant afford a home and have pay more taxes due to the free money for speculators deficit.

    • REPLY
      Fight Back2 DAYS AGO

      This kind of “capitalism” is worst than Communism, we need to punish the speculators or the politicians who prop up house prices.

      Actually we need to jail both for this housing crisis.

      Someone share and spread the above calculation.

    • REPLY
      Kolf2 DAYS AGO

      To be honest, it would make a lot more sense to not allow people with multiple houses to defer mortgage payments. It was a good chance to force speculators to sell.

      • REPLY
        SH2 DAYS AGO

        Well yes but Trudeau’s objective is to protect the housing market for foreign speculators. He’s not in office to represent the interests of Canadians.

    • REPLY
      SH2 DAYS AGO

      Not to mention that renters weren’t given the option to defer their rent. The government forced banks to give mortgage borrowers a 6-month payment holiday without extending the same courtesy to renters.

      • REPLY
        Jupiter2 DAYS AGO

        No mortgage deferrals should be given to anyone with multiple residential properties period.

        The government knew the math, they did it to prop up real estate prices. They pushed inequality further, benefiting only speculators and screwing young families. The Liberals lied to us in the election about foreign ownership tax.

        • REPLY
          Grt6 HOURS AGO

          I agree. However it was the banks decision to allow payment deferrals and not the government. The banks benefited as well from the deferrals since the avoided potential defaults, lowered their LTV ratios as property values increased, and increased the profits by capitalizing the deferred interest which is now compounding interest for the life of the mortgage. Banks win, borrowers win and renters, savers, and working class lose as always.

      • REPLY
        Gary1 DAY AGO

        What makes you think the govt will ever support renters? They will always help the land lord until their last breath even if it means sacrificing renters at the alter

  • REPLY
    Herry1 DAY AGO

    Considering, Turdo and other wealthy Canadian POS DON’T pay their taxes, loss will happen. It’s guaranteed !

  • REPLY
    BoBnUSA1 DAY AGO

    most of the savings I assume are a result of 750K mortgage deferrals

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Canadian Real Estate Sales Slow For The First Time Since The Beginning Of Pandemic

Canadian real estate is still booming, but slowing faster than seasonally expected. Canadian Real Estate Association (CREA) data shows sales made a small decline in October. The decline only shows in the board’s seasonally adjusted numbers. Unadjusted sales still show large growth, but the rate decelerated for the first time since the pandemic.

Canadian Real Estate Sales “Edged Back” 0.7%

Canadian real estate sales are showing some signs pent-up demand is catching up. CREA data shows 56,186 seasonally adjusted sales in October, down 0.7% from the month before. Unadjusted, there were 59,159 sales in the month, up 32.1% from the same month last year. CREA notes sales “edged back” on the seasonally adjusted count, falling from all-time highs. On the unadjusted numbers, we can see sales are strong. They do seem much stronger due to the shifted comparison period though.

Canadian Real Estate Sales

The unadjusted sales for all home types, as reported through the Canadian MLS.
201520162017201820192020JanFebMarAprMayJunJulAugSepOctNovDec010,00020,00030,00040,00050,00060,00070,000Sales
Month201520162017201820192020
Jan 23,289 25,292 25,534 24,977 24,380 27,195
Feb 32,898 38,856 37,754 31,356 30,074 38,161
Mar 45,527 50,773 54,290 41,983 40,167 43,317
Apr 52,982 58,106 53,796 46,344 48,599 20,630
May 56,545 61,412 60,594 51,181 54,599 33,051
Jun 57,380 60,132 53,344 47,613 47,755 54,928
Jul 50,036 48,577 42,599 41,872 47,793 62,533
Aug 43,103 47,419 42,769 41,151 43,478 58,645
Sep 42,615 44,332 39,585 36,201 41,819 61,308
Oct 41,981 42,537 40,691 39,313 44,499 59,159
Nov 36,846 37,178 38,095 33,437 37,213  
Dec 27,488 26,158 27,206 21,983 26,976  
 
Source: CREA, Better Dwelling.

Sales Growth Slows For The First Time Since The Pandemic

Unadjusted growth was large, but also showed some signs of reality returning. The growth rate of 32.1% is massive when looked at by itself. In context, this shows the first deceleration since April. This decline is more than likely a temporary detour, as comparison months to the shutdown in April and May approach.

Canadian Real Estate Sales Change

The annual percent chage of unadjusted sales for all home types, as reported through the Canadian MLS.
UnadjustedJan 2008Jun 2008Nov 2008Apr 2009Sep 2009Feb 2010Jul 2010Dec 2010May 2011Oct 2011Mar 2012Aug 2012Jan 2013Jun 2013Nov 2013Apr 2014Sep 2014Feb 2015Jul 2015Dec 2015May 2016Oct 2016Mar 2017Aug 2017Jan 2018Jun 2018Nov 2018Apr 2019Sep 2019Feb 2020Jul 2020-60-40-20020406080Percent Change
MonthUnadjusted
Jan 2008 -8.57
Feb 2008 -8.78
Mar 2008 -18.94
Apr 2008 -7.04
May 2008 -17.41
Jun 2008 -15.35
Jul 2008 -12.25
Aug 2008 -20.83
Sep 2008 -3.49
Oct 2008 -27.27
Nov 2008 -42.32
Dec 2008 -32.86
Jan 2009 -40.51
Feb 2009 -31.47
Mar 2009 -13.97
Apr 2009 -11.58
May 2009 -0.86
Jun 2009 17.67
Jul 2009 18.69
Aug 2009 18.69
Sep 2009 17.31
Oct 2009 41.73
Nov 2009 72.75
Dec 2009 72.65
Jan 2010 56.26
Feb 2010 44.22
Mar 2010 40.3
Apr 2010 20.4
May 2010 -4.63
Jun 2010 -19.88
Jul 2010 -29.98
Aug 2010 -19.85
Sep 2010 -19.97
Oct 2010 -21.62
Nov 2010 -9.66
Dec 2010 -14.63
Jan 2011 -6.21
Feb 2011 -5.53
Mar 2011 -6.41
Apr 2011 -14.69
May 2011 2.72
Jun 2011 11.2
Jul 2011 12.66
Aug 2011 16.12
Sep 2011 11.73
Oct 2011 9.03
Nov 2011 5.52
Dec 2011 4.76
Jan 2012 4
Feb 2012 8.66
Mar 2012 1.34
Apr 2012 10.99
May 2012 8.72
Jun 2012 -4.71
Jul 2012 2.43
Aug 2012 -8.87
Sep 2012 -15.13
Oct 2012 -0.86
Nov 2012 -12.08
Dec 2012 -17.59
Jan 2013 -6.09
Feb 2013 -16.81
Mar 2013 -15.11
Apr 2013 -3.36
May 2013 -2.61
Jun 2013 -0.55
Jul 2013 9.59
Aug 2013 11.35
Sep 2013 17.74
Oct 2013 8.09
Nov 2013 5.83
Dec 2013 12.27
Jan 2014 0.64
Feb 2014 3.2
Mar 2014 4.88
Apr 2014 0.35
May 2014 5.46
Jun 2014 11.53
Jul 2014 8.1
Aug 2014 2.32
Sep 2014 11.13
Oct 2014 7.57
Nov 2014 3.12
Dec 2014 8.61
Jan 2015 -1.97
Feb 2015 2.67
Mar 2015 9.14
Apr 2015 9.9
May 2015 3.36
Jun 2015 10.96
Jul 2015 3.56
Aug 2015 3.93
Sep 2015 0.31
Oct 2015 0.33
Nov 2015 10.38
Dec 2015 10.26
Jan 2016 8.6
Feb 2016 18.11
Mar 2016 11.52
Apr 2016 9.67
May 2016 8.61
Jun 2016 4.8
Jul 2016 -2.92
Aug 2016 10.01
Sep 2016 4.03
Oct 2016 1.32
Nov 2016 0.9
Dec 2016 -4.84
Jan 2017 0.96
Feb 2017 -2.84
Mar 2017 6.93
Apr 2017 -7.42
May 2017 -1.33
Jun 2017 -11.29
Jul 2017 -12.31
Aug 2017 -9.81
Sep 2017 -10.71
Oct 2017 -4.34
Nov 2017 2.47
Dec 2017 4.01
Jan 2018 -2.18
Feb 2018 -16.95
Mar 2018 -22.67
Apr 2018 -13.85
May 2018 -15.53
Jun 2018 -10.74
Jul 2018 -1.71
Aug 2018 -3.78
Sep 2018 -8.55
Oct 2018 -3.39
Nov 2018 -12.23
Dec 2018 -19.2
Jan 2019 -2.39
Feb 2019 -4.09
Mar 2019 -4.63
Apr 2019 4.57
May 2019 6.68
Jun 2019 0.3
Jul 2019 14.14
Aug 2019 5.65
Sep 2019 15.52
Oct 2019 13.19
Nov 2019 11.29
Dec 2019 22.71
Jan 2020 11.55
Feb 2020 26.89
Mar 2020 7.85
Apr 2020 -57.55
May 2020 -39.8
Jun 2020 15.2
Jul 2020 30.84
Aug 2020 33.5
Sep 2020 45.6
Oct 2020 32.1
 
Source: CREA, Better Dwelling.

Looking at sales on a rolling 12-month basis helps to smooth out some of the distortion. The 12-month rolling average of sales reached 43,593 sales for October, up 9.30% from the same month last year. This is the highest seen since July 2017, when sales were cooling after a multi-year build up to that level. The pandemic’s shutdown of sales still skews the numbers, but it gives the growth a little perspective.

Canadian Real Estate Sales: Rolling Average

The 12-month rolling average of Canadian real estate sales.
12-Months RollingJan 2008Jun 2008Nov 2008Apr 2009Sep 2009Feb 2010Jul 2010Dec 2010May 2011Oct 2011Mar 2012Aug 2012Jan 2013Jun 2013Nov 2013Apr 2014Sep 2014Feb 2015Jul 2015Dec 2015May 2016Oct 2016Mar 2017Aug 2017Jan 2018Jun 2018Nov 2018Apr 2019Sep 2019Feb 2020Jul 2020010,00020,00030,00040,00050,000Sales
Month12-Months Rolling
Jan 2008 43,457
Feb 2008 43,162
Mar 2008 42,366
Apr 2008 42,054
May 2008 41,168
Jun 2008 40,463
Jul 2008 39,968
Aug 2008 39,175
Sep 2008 39,065
Oct 2008 38,129
Nov 2008 36,837
Dec 2008 36,182
Jan 2009 35,246
Feb 2009 34,281
Mar 2009 33,805
Apr 2009 33,329
May 2009 33,293
Jun 2009 33,980
Jul 2009 34,643
Aug 2009 35,206
Sep 2009 35,732
Oct 2009 36,774
Nov 2009 38,055
Dec 2009 39,028
Jan 2010 39,801
Feb 2010 40,730
Mar 2010 41,912
Apr 2010 42,654
May 2010 42,461
Jun 2010 41,551
Jul 2010 40,290
Aug 2010 39,580
Sep 2010 38,868
Oct 2010 38,103
Nov 2010 37,809
Dec 2010 37,471
Jan 2011 37,337
Feb 2011 37,169
Mar 2011 36,906
Apr 2011 36,263
May 2011 36,371
Jun 2011 36,782
Jul 2011 37,155
Aug 2011 37,617
Sep 2011 37,951
Oct 2011 38,202
Nov 2011 38,353
Dec 2011 38,447
Jan 2012 38,528
Feb 2012 38,776
Mar 2012 38,827
Apr 2012 39,238
May 2012 39,594
Jun 2012 39,401
Jul 2012 39,482
Aug 2012 39,187
Sep 2012 38,704
Oct 2012 38,678
Nov 2012 38,328
Dec 2012 37,965
Jan 2013 37,837
Feb 2013 37,314
Mar 2013 36,724
Apr 2013 36,585
May 2013 36,469
Jun 2013 36,447
Jul 2013 36,773
Aug 2013 37,118
Sep 2013 37,598
Oct 2013 37,840
Nov 2013 37,989
Dec 2013 38,198
Jan 2014 38,210
Feb 2014 38,293
Mar 2014 38,455
Apr 2014 38,469
May 2014 38,705
Jun 2014 39,151
Jul 2014 39,453
Aug 2014 39,531
Sep 2014 39,886
Oct 2014 40,131
Nov 2014 40,215
Dec 2014 40,380
Jan 2015 40,341
Feb 2015 40,413
Mar 2015 40,730
Apr 2015 41,128
May 2015 41,281
Jun 2015 41,754
Jul 2015 41,897
Aug 2015 42,033
Sep 2015 42,044
Oct 2015 42,056
Nov 2015 42,344
Dec 2015 42,558
Jan 2016 42,724
Feb 2016 43,221
Mar 2016 43,658
Apr 2016 44,085
May 2016 44,491
Jun 2016 44,720
Jul 2016 44,598
Aug 2016 44,958
Sep 2016 45,101
Oct 2016 45,148
Nov 2016 45,175
Dec 2016 45,064
Jan 2017 45,085
Feb 2017 44,993
Mar 2017 45,286
Apr 2017 44,927
May 2017 44,858
Jun 2017 44,293
Jul 2017 43,795
Aug 2017 43,407
Sep 2017 43,012
Oct 2017 42,858
Nov 2017 42,934
Dec 2017 43,021
Jan 2018 42,975
Feb 2018 42,442
Mar 2018 41,416
Apr 2018 40,795
May 2018 40,011
Jun 2018 39,533
Jul 2018 39,473
Aug 2018 39,338
Sep 2018 39,056
Oct 2018 38,941
Nov 2018 38,553
Dec 2018 38,118
Jan 2019 38,068
Feb 2019 37,961
Mar 2019 37,810
Apr 2019 37,998
May 2019 38,282
Jun 2019 38,294
Jul 2019 38,788
Aug 2019 38,982
Sep 2019 39,450
Oct 2019 39,882
Nov 2019 40,197
Dec 2019 40,613
Jan 2020 40,847
Feb 2020 41,521
Mar 2020 41,784
Apr 2020 39,453
May 2020 37,657
Jun 2020 38,255
Jul 2020 39,483
Aug 2020 40,747
Sep 2020 42,371
Oct 2020 43,593
 
Source: CREA, Better Dwelling.

October was another unusual month, in an unusual year, with a lot of unhelpful and volatile data. In the same year, the all-time low for sales was printed just months before the all-time high. Neither data point is really helpful in the general picture. Real estate sales are doing very well, but not as well as the record smashing numbers would indicate. There’s also the pull-forward effect of lower mortgage rates, which is difficult to gauge in size.

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Contributing editor, stats guy.

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The data relating to real estate on this website comes in part from the MLS® Reciprocity program of either the Real Estate Board of Greater Vancouver (REBGV), the Fraser Valley Real Estate Board (FVREB) or the Chilliwack and District Real Estate Board (CADREB). Real estate listings held by participating real estate firms are marked with the MLS® logo and detailed information about the listing includes the name of the listing agent. This representation is based in whole or part on data generated by either the REBGV, the FVREB or the CADREB which assumes no responsibility for its accuracy. The materials contained on this page may not be reproduced without the express written consent of either the REBGV, the FVREB or the CADREB.