Waiting out the storm

How bad does it get?

This week the big real estate cartels report dismal spring sales – as the gloom spreads. GM is slashing a third of its workforce at the company’s biggest Canadian assembly plant. Trump just announced a 100% tariff on movies made outside the US – horrible news for Toronto, Halifax and the Lower Mainland. On NBC yesterday he repeated that Canada should be a state and the USA has no need for our “energy, lumber or cars”. And tomorrow Mr. Carney goes to Washington, knowing full well what the prez and his hitman JD did to Zelenskyy in the same chair.

Well, maybe things get better from here. Perhaps the new PM can get the North American trade pact reborn. We’ll see. But whatever happens, it will be too late for the poor, starving realtors.

Last week we told you about Calgary and Victoria. Sales down, listings up, prices wavering but still lofty. Supply is overwhelming demand everywhere. Add Vancouver to the list.

April sales crashed 24% year/year (and last year sucked). So just over two thousand properties changed hands, a drop of a third from the 10-year trend.

“The slower sales we’re now seeing stand out as unusual, particularly against a backdrop of significantly improved borrowing conditions, which typically helps to boost sales,” say the realtors. “What’s also unusual is starting the year with Canada’s largest trading partner threatening to tilt our economy into recession via trade policy, while at the same time having Canadians head to the polls to elect a new federal government. These issues have been hard to ignore, and the April home sales figures suggest some buyers have continued to patiently wait out the storm.”

Some storm. Getting worse. The film business in BC generates $3.5 billion a year and employs 47,500 people. Imagine what a 100% tariff might do.

Buyers currently have 16,207 listings to choose from in YVR, 30% more than last year and a staggering 48% above the average over the past decade. The sales-to-active listings ratio for detached homes has melted to less than 10%, meaning nine of ten do not get offers. Thus, it’s a buyer’s market. But without many buyers.

Not surprisingly, the industry is trying to put a positive spin on this mess. “Inventory levels have just crested 16,000 for the first time since 2014, prices have stayed fairly stable for the past few months, and borrowing costs are the lowest they’ve been in years. These factors benefit buyers, and with balanced conditions across the market overall, there’s plenty of opportunity for anyone looking to make a purchase.”

Prices?

Barely moving. The average is down less than 2%, to $1.184 million. Detached houses have melted even less, 0.7%, at just over two million. Condos are off 2%, at an average of $763,000.

GTA realtors will have their stats out soon, but nobody is expecting a different result. Lousy sales. Cautious, worried buyers. Swelling inventory (a record number of condos now on the market in DT Toronto, for example). Assignment sales bloodbath, as detailed here last week. A massive pile of newly-built units available. And prices that do not yet reflect the growing desperation of sellers.

The flow of offers is at the lowest point since 1998. Yeah, twenty-seven years ago. New listings are up by a third, and the total number of properties for sale has jumped over 90%. Detached supply in 416 has mushroomed 160%. As we detailed here last week, the sales-to-new-listings ratio for condos, at 29%, is the lowest in 34 years. Sales of newly-built units are running 95% below 2022 levels.

These numbers are stunning. Most people in the business have never before experienced them. And it’s a safe bet the overwhelming majority of the 60,000+ agents in the GTA will have no sales this year, or not enough to survive on.

So while Trump turns the screws tighter, the economy is already bleeding out. We lost thirty thousand more jobs in March, a whack of them in the GTA, where the unemployment rate is already close to 9%.

Yikes. What next?

Hopefully Carney tempers Tariff Man. Meanwhile the Bank of Canada will start cutting interest rates again on June 4th. Those domestic trade barriers are scheduled to be torn down by the beginning of July. There is hope.

In the meantime, no option but for prices to grind lower. New construction is dead. Realtors are diving Uber. The jobless rate is rising – but so is the savings rate as households sit on their assets. As always, this will turn out to be a moment of opportunity. As always, most will be blind.

About the picture: “This is Ralph, gone these 35 years,” writes Alan, in Nova Scotia. “For over half of his long life we lived year-round in the high Arctic islands, where he always grew a good coat. This shot was taken at 2:00 a.m. in May 1978 at Grise Fiord, Canada’s most northern community, where we lived for 3 years. In 1975 I ran away from home at age 23 and joined the Hudson’s Bay Company after a short stint in banking. In 1976 I was transferred from Iqaluit as the manager of the HBC store in Resolute Bay, on Cornwallis Island. I bought Ralph from a breeder in Ottawa that fall. In 1977 I moved into Grise Fiord as the manager of the Grise Fiord Eskimo Co-op, a small-trading-post-type store in a town of 100 people. We had no radio, no television, no telephones and we got a plane twice a month, maybe. I managed the store, bought fur and carvings, ran the post office, and operated a small primitive “hotel” for the rich folk flying to the north pole as tourists in Twin Otters. I met my late wife there – she was the school teacher. Best years of my life . . . Thanks for all you do, especially in these trying times.”

To be in touch or send a picture of your beast, email to ‘[email protected]’.

Source: https://www.greaterfool.ca/2025/05/05/waiting-out-the-storm/