Cancellations, not just an Air Canada Story

In the past couple of months, the amount and proportion of cancelled detached home listings in Ontario has spiked dramatically. According to Konfidis’ analysis of detailed MLS transaction-level data, since early 2020 through April 2022, total daily cancellations as a percentage of daily closed transactions, on a 30-day rolling basis, hovered in the ~20% range. This is a standard baseline as it is common for listings to be cancelled for many reasons, and perhaps subsequently relisted. But through May and June, this stat spiked significant to over 50%, even surpassing 100% in markets such as St. Catharines and Kitchener-Waterloo during the last weeks of June.


Per Chart 1 below, we can see the seasonal increase in the number of total 30-day trailing cancellations in the summer months as total transaction activity increases, but this current summer season is experiencing roughly double the total cancelations than in recent years. For example, in June 2020 and 2021, the London, Ontario market experienced approximately 110-130 listing cancellations for detached homes, on a 30-day trailing basis. In June 2022, that same figure averaged over 290. To remove seasonality, per Chart 2 below, we assess total 30-day trailing cancellations as a percentage of comparable closed transactions for detached homes. Here we can more accurately see the stark uptick in cancellation activity, coupled with modest decline in sales activity.


We also assess herein total 30-day trailing cancellations as a percentage of new listings for detached homes; see Chart 3 below. While a spike in cancellations can be due to sellers canceling then re-listing their homes (which would appear as a new listing), here we can still see a material rise in cancellations compared to new listings, which typically trends in the 15% range and has roughly doubled in May and June.


Similar to our recent Konfidis Insights analysis titled Ontario Housing Sales "Above Asking," a Thing of the Past?, this trend is also creating compelling prospects for resourceful and opportunistic buyers. Buyers now benefit from improved negotiating leverage, with many sellers nervous about the price, and even likelihood, in which they can sell their home. While total and seasonally-adjusted transaction volume has declined in recent months, there are still compelling opportunities for single-family rental home buyers. Konfidis is dedicated to surfacing, vetting, and delivering such opportunities to its investor clients.


Konfidis is devoted to surfacing data-bolstered market trends for real estate investors. We are looking forward to continuing to follow this shift to a "buyer’s market" and providing additional insights.


Chart 1

Source: Konfidis.com from actual MLS listings, transactions, and cancelations. For detached homes only, on a 30-day trailing basis.


Chart 2

Source: Konfidis.com from actual MLS listings, transactions, and cancelations. For detached homes only, on a 30-day trailing basis.


Chart 3

Source: Konfidis.com from actual MLS listings, transactions, and cancelations. For detached homes only, on a 30-day trailing basis.