National home sales were up on a month-over-month basis in October 2016, says the Canadian Real Estate Association (CREA).
CREA finds national home sales rose 2.4% from September to October, and that actual (not seasonally adjusted) activity was up 2% year-over-year.
Further, the national average sale price climbed 5.9% year-over-year. CREA says The national average price continues to be pulled upward by sales activity in Greater Vancouver and Greater Toronto, which remain two of Canada’s tightest, most active and expensive housing markets.
That said, the association adds, Greater Vancouver’s share of national sales activity has diminished considerably, resulting in it having less upward influence on the national average price (the average price is reduced by more than $120,000 to $361,012, if Greater Vancouver and Greater Toronto sales are excluded from calculations).
Activity was up on a month-over-month basis in about 60% of all local markets, adds CREA, led by the Fraser Valley, Calgary, Edmonton, Hamilton-Burlington and Montreal.
“The expanded stress test for home buyers who need mortgage default insurance took effect in the middle of October,” says CREA president Cliff Iverson. So, “more time will need to pass before its effect on housing markets can be gauged.”
He adds, “The extent to which [it] will push first-time home buyers to the sidelines may vary among housing markets.”
Gregory Klump, CREA’s chief economist, says, “Early evidence suggests that the influence of tighter mortgage regulations on sales activity has been mixed. The federal government will no doubt want to monitor the effect of new mortgage regulations on the many varied housing markets across Canada and on the economy, particularly given the recent rise in uncertainty about economic growth prospects following the U.S. presidential election.”
Breakdown home prices
On a year-over-year basis, price growth accelerated for two-story single family homes and apartment units, while slowing for townhouse/row units.
Benchmark prices for two-story single family homes and townhouse/row units posted the biggest gains in October 2016 (16.7% and 16%, respectively), and price increases were not far behind for one-story single family homes (14%) and apartment units (11.4%).
Greater Vancouver (+24.8%) and the Fraser Valley (+32.5%) posted the largest year-over-year gains, although single family home prices in both of these markets are now off peak.
Double-digit year-over-year percentage price gains were also registered in Greater Toronto (+19.7%), Victoria (+20.1%) and Vancouver Island (+15.8%).
By contrast, prices were down 4.1% year-over-year in Calgary. Although home prices there have held mostly steady since May, they have been below year-ago levels since August 2015 and are down 5.1% from the peak reached in January 2015.
Home prices also edged lower by 1.3% year-over-year in Saskatoon. Home prices in Saskatoon have also held below year-ago levels since August 2015.
Meanwhile, home prices posted year-over-year gains in Regina (+4.5%), Ottawa (+3%), Greater Moncton (+2.8%) and Greater Montreal (+2.6%).
- Transactions were up from year-ago levels in about 60% of all Canadian markets, with activity gains in the GTA and environs offset by year-over-year declines in B.C.’s Lower Mainland.
- The number of newly listed homes climbed 1.7% in October 2016 compared to September. Led by a marked increase in the GTA, new listings were up from the previous month in about 60% of all local markets.
- With sales having risen by slightly more than new listings in October, the national sales-to-new listings ratio edged higher to 62.9% compared to 62.4% in September.
- A sales-to-new listings ratio between 40% and 60% is generally consistent with balanced housing market conditions, and the ratio was above 60% in half of all local housing markets in October–the vast majority of which continue to be located in British Columbia, in and around the Greater Toronto Area and across Southwestern Ontario. The ratio has moved out of sellers’ market territory and into the mid-50 percent range in Greater Vancouver.
- There were 4.5 months of inventory on a national basis at the end of October 2016 – the lowest level in almost 7 years.