Canadian home sales edge higher

National home sales activity edged higher on a month-over-month basis in October 2014, finds the Canadian Real Estate Association (CREA),

The number of home sales processed edged up 0.7%, compared to September, which marks the sixth consecutive month of stronger resale housing activity. Last month was also the strongest October since 2009.

“Low interest rates continued to support sales in some of Canada’s more active and expensive urban housing markets and factored into the monthly increase for national sales,” says CREA president Beth Crosbie. “Even so, sales did not increase in many local markets in Canada.”

In fact, CREA’s chief economist Gregory Klump says, “The strength of national sales activity is far from being a Canada-wide phenomenon, but…sales in a number of B.C. markets have started to recover from weaker demand over the past couple of years, [and] they have been improving across much of Alberta [due to] interprovincial migration and international immigration.”

Actual, not seasonally adjusted, activity in October stood 7% above levels reported in the same month last year. Meanwhile, October sales were up from year-ago levels in about 70% of all local markets, led by Greater Vancouver and the Fraser Valley, Victoria, Calgary, and Greater Toronto—combined sales in these markets account for almost 40% of current national activity.

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Further, Actual, not seasonally adjusted, sales activity for the year-to-date in October was 5.2% above levels in the first 10 months of 2013, and slightly above (up 2.5%) the 10-year average for the same period.

Last month, the number of newly listed homes rose 0.8%, compared to September. While new supply was down in just over half of all local markets, outsized gains in Greater Vancouver, Calgary, Edmonton, and Greater Toronto boosted the national figure.

The national sales-to-new listings ratio was 55.7%, with sales and new listings having once again moved in tandem for the third month in a row.

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Additional highlights

The number of months of inventory is another important measure of the balance between housing supply and demand.

And in October, there were 5.8 months of inventory nationally at the end of the month—it has held to a narrow range between 5.8 and six months since May 2014.

As with the sales-to-new listings ratio, the number of months of inventory remains well within balanced market territory while pointing to a national market that has become tighter since the beginning of the year, when sales got off to a slow start.

At the same time, the Aggregate Composite MLS HPI rose by 5.51% on a year-over-year basis in October. Price gains have held steady between 5% and 5.5% since the beginning of the year.

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Year-over-year price growth accelerated for two-storey single-family homes, townhouse/row units, and apartment units in October. By contrast, price momentum slowed further for regular single-family homes.

Two-storey single-family homes continue to post the biggest year-over-year price gains (up 6.94%), followed closely by townhouse and row units (up 5.83%), and one-storey single-family homes (up 4.75%).

Price growth for apartment units remains comparatively more modest (up 3.51%).

Still, price growth varied among housing markets tracked by the index. As in recent months, Calgary (up 9.47%), Greater Toronto (up 8.30%), and Greater Vancouver (up 6.03%) continued to post the biggest gains. Prices were up between 1% and 2.5% on a year-over-year basis in the Fraser Valley, Victoria, and Vancouver Island, flat in Saskatoon, Ottawa, Greater Montreal, and Greater Moncton, and down 3.4% in Regina.

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