Property prices in Canada up 1.9% year on year, latest index data shows
National home sales increased by 1.9% in July in Canada while prices have been largely unchanged, up just 1% year in year, the latest index report shows.
The data from the Canadian Real Estate Association (CREA) also shows that the number of newly listed homes edged down 1.2% from June to July.
The national average price for homes sold in July 2018 was just under $481,500, up 1% from the same month last year, the first year on year increase since January.
CREA points out that 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 close to $100,000 from the national average price, trimming it to just under $383,000.
Led by the Greater Toronto Area (GTA), more than half of all local housing markets reported an increase sales activity from June to July.
Actual, not seasonally adjusted, activity was down 1.3% year on year and the result reflects fewer sales in major urban centres in British Columbia and an offsetting improvement in activity in the GTA.
‘This year’s new stress-test on mortgage applicants continues to weigh on home sales but its effect may be starting to fade slightly in Toronto and nearby markets. The degree to which the stress-test continues to side line home buyers varies depending on location, housing type and price range,’ said CREA president Barb Sukkau.
However, improving national home sales activity in recent months obscures significant differences in regional trends for home sales and prices, according to Gregory Klump, CREA’s chief economist.
‘Regardless, rising interest rates and this year’s stress test on mortgage applicants will likely prove to be difficult hurdles to overcome for many would-be first time and move up home buyers, heading into the second half of the year and beyond,’ he added.
New listings were down in more than half of all local markets, led by Calgary, Edmonton and Greater Vancouver (GVA). Fewer new listings in these markets more than offset an increase in new supply in the GTA.
The Aggregate Composite MLS® Home Price Index (MLS® HPI) was up 2.1% year on year in July 2018, the first acceleration in annual home price growth since April 2017. It also suggests that the dip in home prices last summer and their subsequent rebound in and around the GTA may contribute to further year on year gains in the months ahead, according to the report.
Apartments saw the largest annual growth with prices up 10.1%, followed by townhouses up 4.7%. One-storey and two-storey single family home prices were again down year on year with a fall of 0.7% and 1.5% respectively, but the declines were noticeably smaller than in recent months.
Trends continue to vary widely among the 15 housing markets tracked by the MLS® HPI, with home prices up from year ago levels in eight of them, little changed in two of them and down in the remainder.
Home price gains are diminishing on an annual basis in the Lower Mainland of British Columbia. GVA was up 6.7%, Fraser Valley up 13.8%, Victoria up 8.2% and elsewhere on Vancouver Island up 13.7%.
Among Golden Horseshoe housing markets tracked by the index, home prices remained above year ago levels in Guelph with a rise of 4.1% and stabilised in Oakville-Milton with a rise of 0.1%. By contrast, home prices remained down on a year on year basis in the GTA with a fall of 0.6% and Barrie and District down 3%.
In the Prairies, benchmark home prices remained down by 1.7% year on year in Calgary, down 1.3% in Edmonton, down 4.8% in Regina and down 2.1% in Saskatoon. Meanwhile, benchmark home prices rose by 7.2% year on year in Ottawa, by 5.7% in Greater Montreal and by 5% in Greater Moncton.