National home sales activity rose nearly 1% from July to August 2014, says the Canadian Real Estate Association (CREA).

The number of home sales processed through the MLS Systems of Canadian real estate Boards and Associations rose 1.8% on a month-over-month basis in August 2014, marking the seventh consecutive monthly increase as well as the highest level for sales since January 2010.

Activity rose in fewer than half of all local housing markets in August, but the national tally was largely fuelled by monthly sales increases in Greater Vancouver, Calgary and Greater Toronto.

“Sales picked up in some of Canada’s most active and expensive real estate markets which fuelled another national increase,” says CREA president Beth Crosbie. “Even so, the national increase in sales does not reflect local trends in many markets across Canada.”

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Actual, rather than seasonally adjusted, activity in August stood 2.1% above levels reported in August 2013. However, sales were up from year-ago levels in only half of all local markets, led by Greater Vancouver and Calgary.

“Sales activity in recent months has remained stronger than was anticipated earlier this year,” says Gregory Klump, CREA’s chief economist.

“Listings and sales this spring were deferred due to unseasonably harsh weather,” he adds, “which subsequently supported activity once the delayed spring home buying season got into gear. This trend was reinforced by a decline in mortgage interest rates.”

Further, he finds, “The boost from deferred sales is still expected to prove transitory. While national activity has yet to cool, sales were down from the previous month in the majority of Canada’s local markets, which may be early evidence that the transitory boost is fading. That said, low interest rates would continue to support housing affordability and sales activity.”

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Year-to-date, sales activity is up 4.3% when compared to the first eight months of 2013. It also remains in line with the 10-year average for the period.

The number of newly listed homes fell 1.2% in August, compared to July. Led by Greater Toronto, new supply was down in about 60% of local markets.

The national sales-to-new listings ratio was 55.5% in August, up from 53.9% in July. This means the housing market became marginally tighter, but it remains well entrenched.

That’s because about half of all local markets posted a sales-to-new listings ratio in the 40% to 60% range in August. Of the remainder, more than half were sitting above the 60% threshold that marks the border between balanced and seller’s market territory, almost all of which are located in British Columbia, Alberta and Southern Ontario.

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The number of months of housing inventory is another important measure of the balance between housing supply and demand. It represents the number of months it would take to completely liquidate current inventories at the current rate of sales activity.

There were 5.8 months of inventory nationally at the end of August 2014, down from six months in May, June and July. As with the sales-to-new listings ratio, the number of months of inventory remains well within balanced market territory—but the metric does point to a market that has become tighter in recent months.

The Aggregate Composite MLS housing price index rose by 5.33% on a year-over-year basis in August. This was unchanged compared to July and little changed from June.

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Year-over-year price growth in August picked up slightly for townhouse/row units and apartment units, but activity slowed for one-level, single-family homes and was unchanged for two-level, single-family homes.

The latter group continues to post the biggest year-over-year price gains (up 6.32%), followed closely by townhouse/row units (up 5.59%) and one-level single-family homes (up 5.23%).

Price growth for apartment units remains comparatively more modest (up 3.38%).

As in recent months, the biggest price gains for homes were posted by Calgary (9.83%) Greater Toronto (7.82%), and Greater Vancouver (5.01%).

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Finally, the actual (not seasonally adjusted) national average price for homes sold in August 2014 was $398,618, up 5.3% from the same month last year.

The national average price continues to be skewed upward by sales activity in Greater Vancouver and Greater Toronto. Excluding those two markets, the average price is $324,738 and the year-over-year increase shrinks to 3.9%.

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