Monday Market Minute | Apr 1, 2019
The spring housing season opens below expectations as CREA reports continued sales weakness. Toronto shows resilience while Vancouver struggles.
What Moved
CREA's March resale data confirmed that the spring housing market opened below historical norms. National home sales fell 4.6% year-over-year, with the weakness concentrated in British Columbia and Alberta. Toronto showed relative resilience, with sales edging positive for the first time since B-20 implementation. Nationally, the average sale price held roughly flat, masking sharp regional divergence.
Why It Matters
For private real estate investors, the regional split demanded nuanced positioning. Toronto-focused mortgage investment corporations and development lenders operated in a stabilizing environment, while BC-exposed portfolios faced continued headwinds. The soft spring opening also dampened new construction starts, which reduced future pipeline for construction lenders but supported the long-term supply-demand thesis for existing housing.
Signal to Watch
April's housing starts data from CMHC would reveal whether developers were pulling back further in response to soft resale conditions. A meaningful decline in starts would signal reduced construction lending opportunity in the near term but tighter future supply — a bullish long-term indicator for housing prices.