The number of home sales increased overall by 2.4% and improved in more than half of all local markets from February to March, led by gains in Greater Vancouver, Fraser Valley, Calgary, Greater Toronto, Montreal, Saskatoon, Hamilton-Burlington, and Kitchener-Waterloo.
Prices are rising in most places compared with a year ago. The actual, not seasonally adjusted, national average price for homes sold in March 2013 was $378,532, representing an increase of 2.5% compared with the same month last year.
Fewer sales compared to year ago levels in Greater Vancouver and Greater Toronto continue exerting a gravitational pull on the national average sale price, but price gains in Calgary and Edmonton are increasingly putting upward pressure on the national average, CREA said.
As evidence of this, excluding Greater Vancouver and Greater Toronto from the national average price calculation yields a year on year increase of 4.3%, while only excluding Calgary and Edmonton yields a year on year increase of just 1.9%.
Year on year price gains fell for all property types tracked by the index. Price growth remained strongest for one storey single family homes, up 3.4%, followed by two storey single family homes up 2.5%, town houses and terraced houses up 2.1% and apartments up 0.4%.
The index rose fastest in Calgary, up 7.7%, followed by Regina up 4.2%, Greater Toronto up 2.9%, Greater Montreal up 2% and the Fraser Valley up by 0.1%. In Greater Vancouver, the index fell further into negative territory with a 3.9% fall year on year.
‘National sales have been holding fairly stable since last summer. We’ll be watching closely as the spring market picks up to see whether the March sales increase marks the beginning of an improving trend,’ said CREA president Laura Leyser.
CREA said that sales in March were constrained by the Easter holiday and an extra full weekend at the end of the month, the latter of which is known as a ‘trading day effect’, both of which generally result in sales being held back. Seasonal adjustment strips out normal seasonal fluctuations and trading day effects that otherwise affect the data. It puts data on an equal footing so that data for any two months can be meaningfully compared to each other and to underlying economic fundamentals.
‘Easter and trading day factors combined effectively to cut March sales short. Activity in the months ahead will reveal whether the monthly improvement in seasonally adjusted March sales reflects technical seasonal adjustment factors or a fundamental improvement in demand,’ said Gregory Klump, CREA’s chief economist.
‘That said, the factors that crimped March sales this year were not in play for the same month last year, resulting in speculation that the gap between sales activity this March and March of last year would be bigger than it was in February. That the gap in fact improved marginally speaks to the resilience of housing demand in Canada,’ he added.
Actual, not seasonally adjusted, activity was 15.3% below levels reported in March 2012, compared to a year on year decline in February sales of 15.9%. Although transactions remained down from year ago levels in more than 90 per cent of all local markets, the gap diminished in a number of large urban markets including Greater Vancouver, Calgary, Regina, Saskatoon, Montreal, and Quebec City.
CREA added that, as was the case in February, Edmonton was the only large urban market in which monthly sales surpassed year ago levels.
‘Analysis will likely continue to focus on how sales remain down from last year, but this shouldn’t come as a surprise given that mortgage regulations and lending guidelines at that time were yet to be tightened. Since those factors came into force, national home sales have held fairly steady, notwithstanding the rise in seasonally adjusted March sales,’ explained Klump.
The number of newly listed homes rose 3.2% month on month in March. New listings were up in about two thirds of all local markets, led by Greater Toronto, Montreal, London and St. Thomas, and Calgary.
With sales and new listings having climbed in tandem, the national sales to new listings ratio was little changed at 49.9% in March compared to 50.3% in February. This measure has held fairly steady around this level for the past eight months. Based on a sales to new listings ratio of between 40 to 60%, slightly over 60% of all local markets were in balanced market territory in March.
The number of months of inventory is another important measure of 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, and it too was little changed in March.
Nationally, there were 6.5 months of inventory at the end of March 2013. This was down from 6.7 months reported at the end of February, resulting from the increase in sales combined with a third consecutive decline in the overall supply of homes for sale.
