It is the largest month on month increase in nearly four years and sales rose in four out of every five local housing markets, including almost all large urban markets.
Actual, not seasonally adjusted, activity in May stood 4.8% above levels reported in the same month last year, and 3.8% above the 10 year average for the month of May.
May sales were led by Greater Vancouver, Fraser Valley, Calgary, and Greater Toronto but monthly activity trailed levels reported last May in Montreal and Halifax-Dartmouth.
‘Over the past 25 years, that widespread a monthly sales increase has been recorded only a handful of times. Even so, the improvement varied by location,’ said CREA president Beth Crosbie.
The actual, not seasonally adjusted, national average price for homes sold in May 2014 was $416,584, up 7.1% from the same month last year. But the national average price continues to be skewed upward by sales activity in Greater Vancouver and Greater Toronto, which are among Canada’s largest and most expensive housing markets.
Excluding these two markets from the calculation, the average price reaches a relatively more modest $336,373 while the year on year increase shrinks to 5.3%.
The MLS Home Price Index, which CREA says provides a better gauge of price trends because it is not affected by changes in the mix of sales activity the way that average price is, was up by 4.98% year on year in May, which is slightly smaller than gains of 5.03% and 5.19% in April and March respectively.
Year on year price growth gained strength for two storey single family homes and townhouse/row units, and lost a bit of momentum for one storey single family homes and apartment units.
Year on year price gains were led by two storey single family homes with growth of 5.98%, followed closely by price increases for one storey single family homes at 5.19% and town houses by 5.04%. The price increase for apartment units was comparatively more modest at 2.93%.
Year on year price growth varied among local housing markets tracked by the index, with the biggest gains having been posted by Calgary at 10.12%, Greater Toronto at 7.08% and Greater Vancouver at 4.27%.
The national trend for new listings has mirrored the trend for sales in recent months. The number of newly listed homes rose 3.8% in May, the fourth straight monthly gain. Also in line with sales activity, new listings were up in about 80% of local markets.
‘In markets where supply had become tight, we expected sales to improve in tandem with listings. Had it not been for such a brutal winter that delayed the launch of the spring market, the improvement in new listings and sales would likely have been more spread out over the past few months,’ said Gregory Klump, CREA’s chief economist.
The data also shows that the national sales to new listings ratio was 53.1% in May, up from 52% in March and April but still well entrenched within the 40 to 60% range that marks balanced market territory. Nearly 60% of all local markets posted a sales to new listings ratio in this range in May.
The number of months of inventory is another important measure of the 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.
The number of months of inventory has firmed slightly since the beginning of 2014. There were six months of inventory nationally at the end of May 2014 compared with 6.5 months at the beginning of the year.
Nonetheless, as with the sales to new listings ratio, the number of months of inventory continues to suggest that Canada’s housing market is generally well balanced, with year on year price growth varied among local housing markets tracked by the index, with the biggest gains having been posted by Calgary with growth of 10.12%, Greater Toronto up 7.08% and Greater Vancouver up 4.27%.
