National home sales in Canada edged back 0.4% from August to September and activity is down 8.9% from the same period in 2017, the latest index figures show.
At the same time, the national average sale price edged up a slight 0.2% year on year in September to an average of $487,000, according to the index from the Canadian Real Estate Association.
The national average price is heavily skewed by sales in the GVA and GTA, two of Canada’s most active and expensive markets. Excluding these two markets from calculations cuts almost $104,000 from the national average price, trimming it to just over $383,000.
The index report points out that while sales activity is still somewhat stronger compared to the first half of this year, it remains well below most other months since 2014.
Sales declined month on month in slightly more than half of all local markets, led by Vancouver Island and Edmonton, along with several markets in Ontario’s Greater Golden Horseshoe (GGH) Region. Activity declines in these markets were offset by monthly gains in the Fraser Valley and Montreal.
The data also shows that about 70% of local markets were down on a year on year basis, led primarily by declines in major urban centres in British Columbia, along with Calgary, Edmonton and Winnipeg.
‘The balance between the number of home buyers and suitable homes varies depending on location, housing type and price range. Differences in market balance will likely come into sharper focus as interest rates rise and cause this year’s new mortgage stress-test to become even more restrictive,’ said CREA president Barb Sukkau.
The number of newly listed homes rose 3% between August and September, led by the Lower Mainland and the Greater Toronto Area (GTA). More than half of all local markets posted a monthly increase in new listings, which was offset by declines in excess of 3% in more than half of the remaining local markets.
‘Sales activity may get all the press but it’s the balance between that and the number of homes for sale that sets the tone for pricing environment. In markets with an abundant supply of homes and slower sales activity, buyers have the upper hand when it comes to negotiations over price,’ said Gregory Klump, CREA’s chief economist.
‘However, in places where buyers are keen to make a purchase but there’s a shortage of homes for sale, sellers are in the driver’s seat when it comes to price. It will be interesting to see how supply and demand respond to rising interest rates amid this year’s new mortgage stress test,’ he added.
A breakdown of the figures shows that apartment units posted the largest year on year price gains in September at 8.4%, followed by townhouse/row units at 4.5%. One storey and two storey single family home prices were little changed, both down by 0.3% year on year.
Trends continue to vary widely among the 17 housing markets tracked by the index. In British Columbia, home price gains are diminishing on a year on year basis, with prices up 2.2% in the Greater Vancouver area and up 8.5% in Fraser Valley, while they were up 8.7% in Victoria. Elsewhere on Vancouver Island they climbed 13.2%.
Among the housing markets in the Greater Golden Horseshoe region that are tracked by the index, home prices were up 8% year on year in Guelph, up 6.1% in Hamilton-Burlington, up 5.9% in the Niagara Region, up 2% in the GTA and up 1.4% in Oakville-Milton. They fell by 3.6% in Barrie and District.
The data from the index also shows that across the Prairies, prices fell by 2.6% in Calgary and in Edmonton, were down by 4.7% in Regina and in Saskatoon down by 1.9%. Prices rose by 6.9% year on year in Ottawa, by 6.1% in Greater Montreal and by 3.4% in Greater Moncton.
