There are signs that the entire market for condominiums is weakening, and not just the volume of sales.
This trend is expected to continue as markets reopen, but unemployment remains high.
Since the beginning of the pandemic, only three markets in Canada have seen sales increase faster than inventory levels.
COVID-19 has softened most real estate markets in Canada, and not just sales volumes alone. According to the Canadian Real Estate Association (CREA), the ratio of sales to new registrations (SNLR) declined in key markets. From February to May, inventories rose faster than sales in all major markets with three exceptions.
SNLR: Only in three markets did sales grow faster than inventory
SNLR is the number of sales in relation to new entries. However, if the ratio is much higher, stock becomes scarcer and prices rise. If the ratio is much lower, the stock becomes looser, which leads to lower prices.
Real estate agents use the SLR to know whether it is a buyer’s or seller’s market. If the SLR is more than 60%, the industry regards the market as a seller’s market.
Since the beginning of the pandemic, only three markets in Canada (Hamilton, Kitchener and Calgary) have seen sales increase faster than the stock. Hamilton (SCHLR of 81%, up to 17.2% since February), Kitchener (76.2%, up to 24.5% since February), Calgary (SCHLR of 53.3%, up to 1.5% since February).
Canada’s housing market is now in full swing after the lockdown
Sales figures for June and July broke the records that had been set a year earlier, as emergency closure restrictions began to ease. The real estate market in Canada is back in full swing.
The Toronto market has transferred its heat to suburban and rural markets. Real estate sales are now taking place across the country with many offers after they have come on the market.
There may be many factors that have caused the increase in demand. It could be the fundamental changes in the appetite of the customers or the high demand for more space and more land. It may be because we have not correctly assessed the extent of demand all along.
So far, only three real estate markets in Canada have recorded significantly higher sales. But three weeks after September, there is currently talk of a “balanced market” where supply and demand are in balance. This is not what was expected, although some large homes are selling for less for no apparent reason. But all in all, the real estate market has fallen.
Condominium markets across Canada have seen a significant increase in sales and have experienced strong demand from sellers following the cooling off caused by the pandemic. Experts believe that the trend will increase with the reopening of the markets.