Wahi’s Weekly Roundup of Top Real Estate Stories

Inflation, interest rates, rock-bottom listings, and more.

By  Josh Sherman | 2 minute read

May 19

Wahi's Week in Real Estate

Every Friday, Wahi brings you the most important real estate stories from the past week.

Canada’s Home Buyers Are Jumping off the Sidelines 

Canadian home sales and prices climbed on a month-over-month basis in April, according to the latest figures from the Canadian Real Estate Association (CREA). The MLS® Home Price Index registered a 1.6% increase last month, while sales soared 11.3% from March. “Over the last few months, there have been signs that housing markets were going to heat back up this year, so it wasn’t a surprise to see things take off after the Easter weekend, which often serves as the opener to the spring market,” said CREA Chair Larry Cerqua, in a news release. The average price of a Canadian home was $716,000 in April. That’s a decline of 3.9% from last year but, as CREA notes, an increase of $103,500 since January. As buyers jump off the sidelines, RBC says sellers are back in the driver’s seat across most major markets, including Toronto. 

“Inflation inched up ever so slightly in April, renewing speculation that the Bank of Canada could be tempted to increase its overnight rate once again.”

Low Listings Could Trigger Home Price Run-up: BMO

Responding to the newest CREA data, BMO Chief Economist Douglas Porter highlights a number that could be a bellwether of soaring home prices in the future. In a note to clients, Porter points out that the sales to new listings ratio was just over 70% in April (so, for every 10 new homes listed, seven were sold). “Such tightness normally points to a big pick-up in prices,” writes Porter, noting that the sales-to-new listing ratio last month is higher than it was at any time in the decade preceding the pandemic. Crea, he adds, suggests that a normal ratio is 55% and typically corresponds to annual home price growth of 5%. “Unless listings suddenly pop, it looks like housing is poised to at least partially reheat again,” he concludes.  

Bank of Canada May Take a Hike: Economist     

Inflation inched up ever so slightly in April, renewing speculation that the Bank of Canada could be tempted to increase its overnight rate once again. “April’s inflation data leave the door open for further Bank of Canada rate hikes,” writes Marc Desormeaux, principal economist at Desjardins, in a study published May 16. The annual rate of inflation in April was 4.4%, down sharply from the June 2022 peak of 8.1%. But it’s higher than the 4.3% registered in March and more than double the central bank’s target of 2%. The Bank of Canada hiked its overnight rate, which influences mortgages, eight times between March 2022 and this January as it tried to combat inflation. Most recently, though, policymakers have been standing on the sidelines as inflation trended lower and lower. 

Luxe Toronto Real Estate Is Ready for the Prime Time      

Luxury listings in Toronto are going to be the star of a new Amazon Prime docu-reality series. Dubbed Luxe Listings Toronto, the program follows the wheelings and dealings of a handful of upscale REALTORS®: Peter and Paige Torkan, founders of Team Torkan and Brett Starke, founder of The Starke Group. “We are thrilled to share an inside look at Toronto’s most stunning real estate with our customers around the world. Not to mention what it takes behind the scenes for these agents to deliver top results for their clients,” said Brent Haynes, head of local originals, Prime Video Canada, in a news release. “From tears and triumphs, each agent will show nothing is off limits to succeed.” 

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Yet Toronto Luxury Housing Market Nears Bottom of Global Ranking   

Toronto’s upscale market may be getting special treatment from Amazon Prime, but it plays a much less glamorous role in a recent ranking of luxe property markets from around the world. Toronto placed 43rd out of 46 on Knight Frank’s Prime Global Cities Index for the first quarter of 2023. Cities’ luxury segments are ranked each quarter based on annual price changes across their respective metro areas. In Toronto’s case, prices were down 13.4%. Only three cities — all in Zealand — saw larged year-over-year drops: Christchurch (-15%), Auckland (-17%), and Wellington (-27.2%). Just 16 markets experienced price gains, led by Dubai (+44%), Miami (+11%), and Zurich (9.4%). “The slowdown in growth has overwhelmingly been driven by sharply higher interest rates following recent tightening in global monetary policy,” the report reads. Across all markets, prices were up 0.4% from a year ago, versus 10.1% in the previous quarter. 


Josh Sherman

Wahi Writer

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