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April 2021 Metro level deep-dive

Key takeaways:

  • Finally some signs of buyer fatigue as seasonally adjusted home sales fell 20% m/m in both Toronto and Vancouver.
    • Condo demand remains robust in major metros in spite of deteriorating cash flow fundamentals. Investors are far more optimistic about a return to 2019-level rents than we are given inbound supply and population growth that will take years to return to pre-COVID levels
  • Record new listings in several metros suggests that pent-up selling pressure may be hitting the market just as demand begins to return to more normal levels.
    • This is welcome news to policy makers as it helps take some of the edge off the crazy price gains we’ve seen in recent months and provides cover for take a “wait and see” approach.
  • Inventory levels remain low across segments in most major metros but are beginning to trend up off the recent lows. Still, we’ve got a long way to go to return to anything resembling a balanced market in most parts of the country.
  • Pricing continues to gain steam led by the perennially supply constrained single-family segment.
    • Watch the Alberta metros where prices are finally accelerating after over a decade of stagnation. There’s potentially compelling value here for long-term investors if Alberta pulls off the “turnaround story” we envision.
    • All eyes are on Toronto and Vancouver, but don’t sleep on Quebec! Median single-family detached prices were up 41% y/y in April on account of available inventory being nearly cut in half compared to last year.
    • Strong investor demand for condos has pushed prices in the city of Toronto up 9.1% in just 3 months!

Quick links:

  1. Toronto: Buyer fatigue sets in as sales fall 20% m/m
  2. Vancouver: Prices accelerate even as sales tumble
  3. Alberta: Price gains pick up steam
  4. Quebec: Median single-family prices surge 41% y/y