Monday Market Minute | Apr 1, 2019

Spring housing season opens soft — CREA data underwhelms

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.

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