Canadian real estate sales are off to a weak start in 2019. Canadian Real Estate Association (CREA) numbers show dollar volumes have made a sharp decline in January. The drop makes this month one of the weakest the country has seen in years.
Real Estate Dollar Volume
Dollar volume is a less popular, but very important, indicator to help determine market liquidity. A rise in dollar volume indicates more money, which generally means more liquidity. Falling dollar volumes mean less money, and generally a decline in market liquidity. By itself, it’s hard to actually extract much meaning. Instead you should combine your takeaway with sales, inventory, and prices to get a better overall market picture.
Canadian Real Estate Dollar Volumes Drop Over 9%
Canadian real estate dollar volumes continue to fall. CREA reported $10.9 billion in sales in January, down 9.4% from last year. Compared to January 2017, last month was down 9.33%. The declines actually make it the second weakest sales volume in at least 3 years, the weakest being this past December.
Canadian Real Estate Dollar Volume
The dollar volume of Canadian real estate sales, as reported through the MLS.
Source: CREA, Better Dwelling.
Largest Dollar Volume Declines Are In British Columbia
The biggest gainers from last year were London, Quebec, and Ottawa. London had the highest increase to $201 million in sales in January, up 33.6% from last year. Quebec City followed with $151 million in sales, up 19.5% from last year. Ottawa came in third with $332 million, up 18.4% from last year. These three markets are considered “major,” but all do a relatively small amount of transactions in contrast with the largest markets.
Canadian Real Estate Dollar Volume By Market
The dollar volume of Canadian real estate sales in markets with over a billion in sales, as reported through the MLS.
The largest declines in real estate sales were all located in British Columbia. Fraser Valley was the biggest loser with $481 million in January sales, down 42% compared to the same month last year. Vancouver followed with $1.11 billion, down 41.7% from last year. Victoria came in third, reporting $196 million in sales, down 32.2% from last year.
Toronto was somewhere in the middle in January. Just over $3 billion in sales went through in January, up 1.3% from last year. The number is still negative in real terms, but outperformed the national average. A big change from last year, when it was leading the way lower for many months.
The year is off to a weak start, with dollar volumes dropping off in the first month. Most of the weakness is coming from Western Canada, especially in places that saw a sudden surge in prices over the past few years. However, there is some growth in smaller and cheaper markets.