Property sales in Canada reach record all-time high in March

Residential property sales in Canada increased by 1.5% in March month on month while average sale prices are up over 15% year on year, the latest index shows.

The month on month 1.5% sales rise to set a new all-time record in March but there were some falls, most notably a decline of 0.3% in Greater Vancouver and a fall of 1.8% in the Greater Toronto Area although both remain near record highs reached the month before.

The data from the index from the Canadian Real Estate Association (CREA) also shows that sales in March were up from the previous month in about 60% of markets, including Victoria, Chilliwack, the Okanagan Region, Edmonton, Calgary, Woodstock-Ingersoll, Kingston, Barrie and Montreal.

‘Greater Vancouver and the GTA are heading into the spring home buying season with soaring demand and a shortage of listings,’ said CREA president Cliff Iverson. ‘Meanwhile, other major urban markets in Canada are well balanced or are amply supplied,’ he added.

Gregory Klump, CREA chief economist, pointed out that single family home sales in the Lower Mainland of BC and the GTA set new records for March in the range between $500,000 and $1 million as did sales above a million dollars.

‘Sales below a half a million dollars, which were not subject to recently tightened mortgage regulations, are being increasingly restrained in these markets by a short supply of listings. If current sales and listings trends persist, price gains may pick up further this spring,’ he explained.

Actual, not seasonally adjusted, sales activity was up 12.2% from one year ago and set a new record for the month of March. It also stood 14.2% above the 10 year average for the month.

It surpassed year ago levels among nearly two thirds of all local markets, with BC’s Lower Mainland and the GTA contributing most to the year on year increase in national activity. Sales in a number of other markets in BC and Ontario also posted double digit gains, with Chilliwack sales double what they were one year ago.

The Aggregate Composite house price index rose by 9.1% year on year, the biggest gain since June 2010. For the second consecutive month, year on year price growth accelerated for all Benchmark property types tracked by the index.
Two storey single family home prices posted the biggest year on year gain at 10.8% followed by townhouse/row units up 8.6%, one storey single family homes up 8.1% and apartment units up 7.3%.

The data also shows that year on year price growth continues to vary widely among housing markets tracked by the index, with nine of the 11 markets tracked by the index having posted year on year price gains in March.

Greater Vancouver saw growth of 23.2% while prices were up 22.1% in the Fraser Valley, up 11.6% in Greater Toronto, up 10.8% in Victoria and up 7.1% in Vancouver Island. Prices fell by 3.7% in Calgary and by 2.7% in Saskatoon.

Smaller price growth was recorded in Regina with a rise of 0.5%, they were up 1.2% in Ottawa and 1.5% in Greater Montreal.

The actual, not seasonally adjusted, national average price for homes sold in March 2016 was $508,567, up 15.7% year on year but if Greater Vancouver and Greater Toronto are excluded the average is a more modest $366,950 and the year on year gain is reduced to 10.4%.

Even then, the gain reflects a tug of war between strong average price gains in housing markets around the GTA and in the Lower Mainland of British Columbia versus flat or declining average prices elsewhere in Canada. The average price for Canada net of sales in British Columbia and Ontario was down 1% year on year to $299,591.

The number of newly listed homes fell 1.4% in March 2016 compared to February. The national decline was led by the GTA and Hamilton-Burlington.

With sales up on the month and new listings down, the national sales-to-new listings ratio rose to 61.7% in March 2016, the ratio’s tightest reading since October 2009. A sales to new listings ratio between 40% and 60% is generally consistent with balanced housing market conditions, with readings below and above this range indicating buyers’ and sellers’ markets respectively.

The ratio was within this range in fewer than half of all local housing markets in March and was above the range in a nearly equal number of markets, almost all of which are in British Columbia and Ontario.