The actual, not seasonally adjusted, national average price for homes sold in October 2013 was $391,820, an increase of 8.5% from the same month last year. CREA said that the size of year on year average price gains continues to reflect the decline in sales activity last year in some of Canada’s larger and more expensive markets which caused the national average price to drop at that time.
If Greater Toronto, Greater Vancouver, and Calgary are removed from national average price calculations, the year on year increase shrinks to 4.9%.
CREA points out that the MLS Home Price Index provides a better gauge of price trends, since it is not affected by changes in the mix of sales activity the way that average price is.
The Aggregate Composite MLS HPI rose 3.52% compared to October 2012. Year on year price growth picked up among all property types tracked by the index, led by one storey single family homes with growth of 4.19%, two storey single family homes up 3.88%, town houses and terraced houses up 3.28% and apartment up 2.05%.
Year on year price growth in the MLS HPI was mixed across housing markets tracked by the index, led by Calgary with growth of 8.17% and Greater Toronto up 4.54%. Although the prices remained below year ago levels in Greater Vancouver, Victoria, Vancouver Island, and Regina, October marked the smallest year on year decline in 2013.
The number of home sales processed through the MLS® Systems of Canadian real estate Boards and Associations and other co-operative listing systems fell 3.2% month on month in October, taking activity back to near where it stood last June and July.
‘October’s lower activity provides early evidence confirming that sales in the later summer and early fall were boosted by homebuyers with pre-approved mortgages at lower than current interest rates jumping into the market before their preapprovals expired,” said Gregory Klump, CREA’s chief economist.
‘Now that interest rates appear to be going nowhere fast, sales activity in the near term may be held in check by homebuyers who are in less of a hurry to purchase. While the Finance Minister will no doubt continue to keep a close eye on Canadian housing markets for signs of overheating as interest rates remain low, October sales results may provide him with reassurance that tightened mortgage regulations and lending guidelines are working as intended,’ he explained.
Sales were down in a little over half of all local markets, including Greater Vancouver, the Fraser Valley, Greater Toronto, Hamilton-Burlington, and Montreal. The monthly decline in activity among these markets offset increased activity in a handful of less active major urban centres.
The data also shows that October’s seasonally adjusted sales figure stood slightly above, 0.9%, the average for monthly sales over the past 10 years. Actual, not seasonally adjusted, activity saw an 8.3% year on year gain in October.
Sales were up on a year on year in just over half of all local markets led by gains in Greater Vancouver, Calgary, Edmonton, and Greater Toronto.
CREA said that despite considerable monthly sales volatility in recent years, annual sales remain remarkably stable. With just two lower volume months left to go this year, sales for the year to date in October stand broadly in line with activity over the same period in each of the past five years and well off the peak reached in 2007.
The number of newly listed homes declined by 0.8% month on month with a fairly even split between the number of markets where new supply fell and the number where it remained stable or increased.
With the monthly decline in sales having outstripped the dip in new listings, the national sales to new listings ratio fell to 54.6% in October compared to 55.9% in September. CREA said this remains well within balanced market territory, which has been the case since early 2010.
Based on a sales to new listings ratio of between 40 to 60%, about two thirds of all local markets were in balanced market territory in October.
‘A majority of local markets across the country are still seeing a healthy balance between buyers and sellers coupled with modest price growth,’ said CREA president Laura Leyser. ‘Even so, there are some markets in the Prairies and in parts of south western Ontario where competition among buyers has increased, while parts of Quebec and some areas in the Maritimes have been seeing increasing competition among sellers,’ she added.
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.
There were six months of inventory at the national level at the end of October, up from 5.9 months one month earlier, which was the first increase since February.
