Residential Market Commentary - Market optimism remains cautious
A lot of economic and housing indicators are looking good. But, are we heading up the recovery ladder, or is this just the first hill on a rollercoaster ride?
Probably the best news so far is the surprising jump in employment for June. More than 950,000 jobs were restored last month, far better than the 700,000 that was forecast by economists. Every province added jobs with the biggest gains in Ontario and Quebec.
Strong employment is good news for the housing and mortgage industries. While there is no direct link to last month’s job numbers the June statistics from some of the country’s biggest real estate boards show confidence remains high. On a year-over-year basis:
- The Greater Toronto Area shows a 1.4% increase in sales with a 12% increase in the average price.
- Greater Vancouver sales rose almost 18% with a price increase of 3.5%.
- Greater Montreal saw sales jump 16%, with prices up 6.0%.
- Ottawa sales dipped a slight 1.4%, but the average price bounded up by 17%.
- Calgary, which has been badly battered by weak oil prices as well as the COVID-19 shutdown, experienced a modest 2.0% decline in sales and a slight 0.2% dip in prices.
The numbers are good, especially under the circumstances. But as government relief programs wind down and mortgage deferral arrangements expire, uncertainty is going to become a much bigger factor. It is the key factor in the Canada Mortgage and Housing forecast that warns of price declines of 9% to 18% over the next year.