Home sales fell in Canada in December, latest index data shows

Home sales in Canada fell slightly month on month in December but are still above where they were a year ago, according to the latest data from the Canadian Real Estate Association.

Transactions were down 0.6% overall and fell in slightly more than half of all local markets, led by declines in Calgary, Edmonton, the York Region of the Greater Toronto Area (GTA) and Hamilton Burlington which offset monthly activity gains recorded elsewhere.

Year on year price growth continued to range widely among housing markets tracked by the index. The actual, not seasonally adjusted, national average price for homes sold in December 2015 was $454,342, up 12% year on year, but it continues to be pulled upward by sales activity in Greater Vancouver and Greater Toronto, which are among Canada’s most active and expensive housing markets.

If these two housing markets are excluded from calculations, the average is a more modest $336,994 and the year on year gain is reduced to 5.4%. Even then, the gain reflects a tug of war between strong average price gains in housing markets around the GTA and the Lower Mainland of British Columbia versus flat or declining average prices elsewhere in Canada, the report points out.

It adds that if British Columbia and Ontario are excluded from calculations, the average price slips even lower to $294,363, representing a year in year decline of 2.2%.

Greater Vancouver with a rise of 18.87% and the Fraser Valley up 14.35% posted the largest gains, followed closely by Greater Toronto up 10.01%. Victoria and Vancouver Island prices increased between 6% and 8% and prices were up by 0.62% in Ottawa, by 1.81% in Greater Montreal and by 3.88% in Greater Moncton.

Prices fell by 2% in Calgary and Saskatoon and by 4% in Regina. While the home price declines in Calgary and Saskatoon are a fairly recent trend, prices in Regina have been trending lower since early 2014, the index report points out.

An increasingly short supply of listings in Vancouver and Toronto blunted the impact of changes to mortgage regulations announced in December that were aimed at cooling these housing markets, according to CREA president Pauline Aunger.

‘Buyers there had been expected to bring forward their purchase decisions before new regulations take effect in February 2016, but they faced a growing shortage of supply. Meanwhile, supply is ample in many other major urban markets, particularly those where buyers have become cautious amid economic uncertainty,’ she explained.

Indeed, December mirrored the main themes of 2015, with strong sales activity and price growth across much of British Columbia and Ontario offsetting declines in activity among oil producing regions, said Gregory Klump, CREA’s chief economist.

‘The recent decline and uncertain outlook for oil prices means that housing market prospects are unlikely to improve in the near term in regions where job market prospects are tied to oil production,’ he added.

A breakdown of the figures show that actual, not seasonally adjusted, sales rose 10% year on year and activity was up compared to December 2014 in about 60% of all local markets, led by the Lower Mainland of British Columbia, the GTA and Montreal.

Sales activity in the fourth quarter of 2015 was up 2% quarter on quarter taking it to the highest quarterly level in six years. Annual home sales in 2015 were up 5.5% the previous year and reached the second highest annual level on record, just 3% short of the annual record set in 2007.

The number of newly listed homes rose 2.2% in December compared to November and this built on the 3.3% gain recorded in November and lifted new supply to the highest monthly level in almost six years. December’s increase was driven by gains in the Fraser Valley, Calgary, Edmonton, the GTA and Montreal.

Two storey single family homes continued to post the biggest year on year price gains with growth of 9.15%, followed by one storey single family homes up 6.63%, townhouse/row units up 6.12% and apartments up 4.96%.

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