Home sales growth continues in Canada, latest real estate index shows
Residential property sales increased by 3.5% month on month in July and are now up 12.6% compared to the same month in 2018, the latest national real estate index shows.
Meanwhile, prices increased by 3.9% to $499,000 compared with July 2018, according to the figures from the Canadian Real Estate Association (CREA).
The index report points out that the national average price is heavily skewed by sales in the Greater Vancouver Area and the Greater Toronto Area, two of Canada’s most active and expensive housing markets. Excluding these two markets cuts the national average price to $393,000.
Home sales have now increased for a fifth consecutive month, putting them about 15% above the six year low reached in February 2019 but still more than 10% below the highs reached in 2016 and 2017.
Activity advanced in about 60% of all local markets. While the monthly increase was led by Greater Vancouver (GVA) and Greater Toronto (GTA), sales there remain well below levels recorded prior to the mortgage stress test that came into effect in 2018, the index report points out.
Sales were up from year ago levels in most of Canada’s largest markets, including the Lower Mainland of British Columbia, Calgary, Edmonton, the GTA and Hamilton-Burlington, Ottawa and Montreal.
‘Sales are starting to rebound in places where they dropped when the mortgage stress test took effect at the beginning of 2018, but activity there remains well below levels recorded prior to its introduction,’ said Gregory Klump, CREA’s chief economist.
‘Sales continue to rise in housing markets where the mortgage stress test had little impact due to upbeat local economic conditions and a supply of affordably priced homes. Meanwhile, the mortgage stress test is doing no favours for homebuyers and sellers alike in places facing challenging local economic prospects and subdued consumer sentiment,’ he added.
The number of newly listed homes edged back by 0.4% in July. There was an almost even split between the number of local markets where new listings rose and those where they eased. The increase in new listings in Calgary, the GTA and Edmonton offset a decline in new listings in the Lower Mainland of British Columbia and Montreal.
The monthly sales increase together with a marginal monthly decline in new listings resulted in the national sales to new listings ratio tightening to 59.8% in July from 57.6% recorded in June. This marks its tightest reading and the biggest deviation above its long term average of 53.6% in the past year.