Property market in Canada saw sales fall considerably in May

Residential property sales in Canada fell by 6.2% month on month in May with activity overall down 1.6% compared to the previous year, the largest decline since August 2012.

The latest index from the Canadian Real Estate Association (CREA) also shows that average prices nationally are 4.3% higher than they were in May 2016 and the number of homes for sale edged up by 0.3%.

This took the national average price for homes sold in May 2017 to $530,304 but it continues to be pulled upward by Greater Vancouver and Greater Toronto, which are two of Canada’s most active and expensive housing markets. Excluding these two markets takes the national average price to $398,546.

While prices were up from year ago levels in 11 of 13 housing markets tracked by the index, it varied widely by location. After having dipped in the second half of last year, home prices in the Lower Mainland of British Columbia have been recovering and have either reached new heights or are trending toward them.

Prices in Greater Vancouver were up by 8.8% year on year and in Fraser Valley up by 14.7% and remained in the 20% range in Victoria and elsewhere on Vancouver Island.

Price gains slowed on a year on year basis in Greater Toronto and particularly in Oakville-Milton but remain well above year ago levels with Greater Toronto up 29% and Oakville-Milton up 23.9%.

Sales were down from the previous month in about half of all local markets, but the sizeable national decline largely reflects a 25.3% month on month drop in the Greater Toronto Area (GTA).

Activity was also down significantly from the previous month among other housing markets across the Greater Golden Horseshoe region, including Oakville-Milton, Hamilton-Burlington and Barrie. By contrast, activity rose to multi-year highs in Montreal and Quebec City.

CREA said that changes to housing policy in Ontario have had an impact on the market as it is the first full month of data since.

The figure show that there were 4.7 months of inventory on a national basis at the end of May 2017, up from 4.3 months in April and 4.1 months in March. This returns the measure to where it was for much of 2016.

With new listings having surged and sales having declined in some markets within the Greater Golden Horseshoe, the number of months of inventory in the region is up from all-time lows. That said, housing markets in the region remain among the tightest in Canada, with most urban centres in the region still registering less than two months of inventory.

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