While many Canadian homebuyers remain on the sidelines, some regions across the country are seeing detached-property buyers lured back to the market amid a substantial decline in prices, according to a report released Thursday from RE/MAX Canada.
The report found an increase in second-quarter home sales across 40 per cent of Greater Toronto Area neighbourhoods and 31 per cent of Greater Vancouver communities compared to the first three months of the year.
“For those buyers that were active in [the second-quarter], improved housing affordability due to easing prices and the threat of higher rates down the road clearly provided the impetus for many to leap into detached home ownership,” said Christopher Alexander, president of RE/MAX Canada, in a release on Thursday.
In Toronto, the bulk of the communities that saw an increase in detached home sales occurred within city limits.
“Given that the core has traditionally been more resilient, bolstered by strong demand, a finite supply of homes available for sale, higher household incomes, and greater equity at the top end of the market, the results are not unexpected,” Alexander said.
Detached home prices in Canada’s two largest housing markets have fallen since hitting a peak earlier this year as borrowing rates soared.
The benchmark price of a detached home in the city of Toronto was $1,515,763 in July, compared to $2,073,989 in February, according to the Toronto Regional Real Estate Board.
The price decreases have been less pronounced in Vancouver. The benchmark home price of a single-family home was $2,000,600 in July, compared to $2,139,200 in April.
Some realtors have seen sellers choose to de-list their home amid the downturn in prices, leading to a crunch in inventory in certain regions.
John Pasalis, a prominent real estate broker in Toronto and president of Realosophy, told BNN Bloomberg in July he saw a “huge increase” in the number of delisted homes
for a variety of reasons, including sellers opting to re-list their home at lower prices.
Alexander said he expects the trend of low housing inventory to continue.
“It’s a real challenge, as supply of detached homes remains low from a historical perspective and also in the context of population growth and future needs. This will remain a crucial factor impacting Toronto and Vancouver,” he said.
“Tougher market conditions and a possible recession will be major market hurdles, but history reminds us that recessions often bring strong rebounds.”