Sales fell 0.5% from November to December but there are still some differences in trends between local housing markets, according to the latest statistics from the Canadian Real Estate Association (CREA).
Prices have moved little during the last 12 months. Average home prices increased 1.6% compared with December 2011. CREA said that the national average price continues to be influenced by fewer sales in Greater Vancouver and Greater Toronto compared to the same period a year earlier. Excluding these two markets prices rose 3.3% year on year.
Prices sold through the MLS system, which is regarded as providing a better gauge of home price trends as it is not affected by changes in the mix of sales, increased by 0.3% but when Greater Vancouver and Greater Toronto are excluded from the figure the rise was 2.8%.
The MLS house price index rose fastest in Regina, up 10.5% year on year, although the increase was the smallest since March. Calgary saw a 7.4% rise, Greater Montreal was up 3.3% and the Fraser Valley was up 0.5%. In contrast the MLS index fell by 2.3% year on year in Greater Vancouver.
‘National sales activity continues to hold fairly steady at lower levels since mortgage rules were changed earlier in 2012, but there are still some real differences in trends between and within local housing markets,’ said CREA president Wayne Moen.
Actual, not seasonally adjusted, activity was 17.4% below December 2011 levels and four out of every five local market posted a year on year decline in sales activity. Calgary was the only exception with activity up 7% year on year.
‘Similar to what we saw in September, December sales had fewer business days compared to the same month last year and most other years. It factored into December’s year on year decline in sales activity,’ said Gregory Klump, CREA chief economist.
A total of 453,372 homes traded hands over Canadian MLS Systems in 2012, down 1.1% from annual activity in 2011, and 1.4% below the 10 year average from 2002 to 2011.
‘Successive rounds of tightening mortgage regulations have kept the housing market in check during what has become an extended low interest rate environment,’ added Klump.
The number of newly listed homes fell a further 1.3% in December following declines of 1.1% in November and 4.1% in October, to reach the lowest level since March 2011.
While Greater Toronto posted the largest decline, new listings were down in half of all local markets in December including Greater Vancouver, the Fraser Valley, and Vancouver Island.
‘The decline in new supply may reflect purchase offers below asking price that are made to sellers who are under no pressure to sell. Instead they choose to take their homes off the market once their listing expires,’ said Klump.
‘In the absence of economic stresses like a spike in interest rates or a sharp drop in employment, this dynamic can be expected to keep the housing market in balance,’ he explained.
The number of months of inventory, an important measure of balance between housing supply and demand, was little changed. Nationally, there were 6.7 months of inventory at the end of December 2012, unchanged from its reading at the end of November. The number of months of inventory nationally has remained close to 6.6 months since August 2012.
