REBGV Sales Update Through June 2018

REBGV released their stats package through June 2018. Here are the numbers:

 

Sales remain markedly weaker than last year, led by a significant drop in detached sales. Attached and apartment (i.e. condo) sales are lower as well, but not "dead". New listings are average and inventory growth has picked up. Months of inventory has increased to levels that indicate flat prices.

A quick update on construction activity. Starts remain robust and completions have picked up. Ground-oriented completions are the highest since 2006. Under construction is very high, in part due to raw activity, but also exacerbated by shortages in trades, inspections, and custom materials that increase build times. The number of units entering the market has been significant and it is likely this has led to both an easing in rent growth and additional used home inventory coming online. And we're nowhere near done. Supply is coming, baby, and it's real, and it's spectacular!

The summer doldrums are upon us, where new listings and sales are lower than the spring. The fall will see a smaller bump, and price changes are typically lower in the fall than the spring. I am not expecting significant upwards price pressure in the fall, and if sales remain weak through the summer, I would not rule out outright year-on-year price drops in the composite benchmark house price index. (Based on feedback from some real estate agents, year-on-year drops in the detached HPI are probable.)

Predictions too far out are difficult for a variety of reasons, but based on the amount of supply coming online, I am not anticipating 2019 to be a strong year. Stronger immigration intake and renewed monetary stimulus in Asia are upside risks to this assessment.