Canada edging towards a sellers market, according to real estate agents

Average residential property prices in Canada have increased 4.6% year on year last month, the smallest increase since January, according to the statistics from the Canadian Real Estate Association (CREA).

But national resale housing activity rose slightly in November from the previous month and the real estate market remains balanced but is edging closer to a sellers market, the report also shows.

Sales activity edged upward by 0.5%, the third straight month in which national activity was up from the previous month’s levels. Activity rose in about 60% of all local markets with a record November in the Halifax-Dartmouth region offsetting a dip in sales in Toronto.

‘The Canadian housing market is proving resilient in the face of ongoing global economic and financial uncertainty, to the benefit of Canadian economic growth,’ said Gary Morse, CREA’s president.

Throughout most months in 2011, actual (not seasonally adjusted) national home sales were in line with the 10 year average. November sales marked a break in that pattern, climbing seven per cent above the 10 year average and reaching the fourth highest level on record for the month.

‘Toward the end of every year, there’s a natural inclination to compare how momentum for national sales activity and average price compare to the year before,’ said Gregory Klump, CREA’s chief economist.

‘National sales activity picked up late last year, and November’s results suggest that a similar trend may be playing out again this year. By contrast, national average price also picked up toward the end of last year, whereas this year it has held steady after having peaked in the spring,’ he explained.

‘With interest rates expected to remain low for longer, the housing sector will no doubt be closely watched for signs of excess. That said, current trends for resale housing and new home construction suggest that tightened mortgage regulations are working as intended and fostering economic stability in Canada,’ he added.

The number of months of inventory nationally stood at six months at the end of November. It has held steady at about this level since April, which is above levels posted during the first quarter. The number of months of inventory represents the number of months it would take to sell current inventories at the current rate of sales activity, and is another measure of the balance between housing supply and demand.

The actual (not seasonally adjusted) national average price for homes sold in November 2011 stood at $360,396. This represents a year on year increase of 4.6%, its smallest increase since January.