(Bloomberg) — Canada’s hottest housing markets are slowing down as unsold condos pile up with more people fleeing dense downtown living for the suburbs.
Home sales in Toronto, Canada’s financial capital, fell 2.1% in November from October, the third straight month transactions have dropped on a seasonally adjusted basis, according to data released Thursday by the Toronto Regional Real Estate Board.
In Vancouver, which has Canada’s most expensive real estate, home sales slid 17% on an unadjusted basis compared with a month earlier, the Real Estate Board of Greater Vancouver said Wednesday. Prices were more or less flat in both cities compared with October.
The recent slowdown is a sharp reversal from the months after the initial pandemic lockdown ended and pent-up demand, fueled by low mortgage rates, pushed prices to new heights.
Toronto has now been forced back into lockdown while Vancouver has implemented its own restrictions to curb rising coronavirus infections. That’s put Canada’s economy on shakier ground just as the housing market in each city looks to be losing steam, weighed down by weakness in the downtown housing people are leaving behind.
There’s still appetite for larger, ground-level homes, particularly in the suburbs. Sales of those properties continued to rise in both Toronto and Vancouver in November, and remain elevated compared with last year.
In both the Toronto and Vancouver metropolitan areas the hottest housing markets in November were in the semi-agricultural areas farthest from downtown. Those lager, more scenic properties have become more attractive as residents work from home.
In the City of Toronto, meanwhile, the number of condos listed for sale doubled in November compared to the same month last year, causing average prices to fall 3% according to the TRREB data. The benchmark price for an apartment in Vancouver registered a 1% decline in November from the previous month.
(Updates with year-over-year sales number in sixth paragraph.)
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