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Like househunters, real estate market observers in Canada are paying close attention to home listings in some of the country’s biggest markets.
The severe shortage of homes available on resale markets in Toronto and Vancouver is more than just a point of frustration for prospective buyers — it could spell trouble for the Canadian housing market as a whole, suggests one economist.
David Madani, Capital Economics’ senior economist for Canada, says new listings in Toronto are now at recession-time lows and notes they are slumping in Vancouver as well.
“The upshot is that the largest housing markets that have been responsible for the biggest house price gains over the past two years are now approaching a potentially dangerous tipping point,” writes Madani in a data response to the Teranet-National Bank House Price Index, also released today.
According to the Toronto Real Estate Board, there were 5,400 active listings on the market across the Greater Toronto Area at the end of February, roughly half of what buyers would’ve had access to a year prior.
Meantime, according to National Bank’s index, Toronto home prices, excluding condos, were up 23 per cent in February compared to the same time last year, pushing the national index up 13.4 per cent, the biggest annual increase since November 2006.
Hamilton and Victoria trailed Toronto with price appreciation of 19.7 per cent and 15.9 per cent, respectively. Vancouver home prices were still up 14.3 per cent from a year ago.
“The Toronto market is especially worrisome,” writes National Bank Senior Economist Marc Pinsonneault. “For various reasons, supply (number of listings) on the home resale market is at an historical low,” he continues.
This, says Capital Economics’ Madani, “is further evidence that prospective move-up buyers, the real driving force in Toronto, are losing confidence.”