Housing market holds strong in March

Prices continued to tick up in March (1.2%), although the growth seems to be flatlining. It's a tale of 2 markets where freehold properties are still moving relatively quickly due to supply constraints and the condo market continues to face challenges with more supply than demand. Sales volume came in lower than expected driven by the difficulty to qualify at today's rates and forecasts for rate cuts reducing.

New listings were also lower than anticipated but much stronger than sales and as a result active inventory now sits 23% higher than this time last year. Note that the percentages seem large but in actual figures, active inventory is still quite low. Months of inventory is hovering around 2.5 months still technically in a seller's market. This means that it would take approximately 2.5 months for all of the current inventory to be absorbed if there were no new listings that came out. Sales to new listings ratio also remains in a 'balanced' market.

Inventory is following similar trends to last year with sales and new listings growing at relatively similar rates. As a result, inventory is starting to grow, albeit slowly. Chances are more inventory will continue to come on following seasonal trends but at least for the next few months, so should sales. How fast each grow will likely be one of the most important metrics impacting prices and something to watch.

Other Real Estate News:

• Home Buyer Plan withdrawal limits for RRSPs increased from $35K to $60K providing some added incentives for those looking to get into the market
• First Time buyers are now able to access 30 year amortizations on insured mortgages (less than 20% down) when purchasing newly-built homes. Unfortunately due to the high premium vs. resale that new builds often carry, this may not be the best course of action for many first time buyers
• The capital gains inclusion rate increased from 50% to 66.67% for gains greater than $250K for individuals and from 50% to 66.67% on the entire gain for corporations. This would be effective for gains realized on or after June 25, 2024. This has some significant implications for investors and it is recommended to speak to a tax advisor to see how this could impact you
• Bank of Canada is signaling the first rate cut could happen in June. This is welcome news for those holding variable mortgages but will do little to impact buyer purchasing power as fixed rates are quite a bit lower already. Until variable rates approach fixed rates, most consumers will opt for fixed rates. However, this could change buyer sentiment and still have a positive overall impact to the market.

Prices in April have remained relatively flat while number of sales have been lower than expected. Let's see where numbers land when the dust settles!