Property sales unchanged in Canada in June 2019

Residential property sales were little changed in June 2019 from the previous month, up just 0.2%, while the number of newly listed home rose by 0.8%, the latest agency figures show.

Nationally prices fell by 0.3% year on year in June 2019. For the second month in a row, all benchmark property categories tracked by the index posted annual declines, according to the figures from the Canadian Real Estate Association (CREA).

The national average price for homes sold in June 2019 was just under $505,500, up 1.7% from the same month in 2018. The national average price is heavily skewed by sales in the GVA and GTA, two of Canada’s most active and expensive housing markets. Excluding these two markets from calculations cuts almost $106,000 from the national average price, trimming it to less than $400,000.

A breakdown of the figures show that prices were flat on a month on month basis on Vancouver Island and in Calgary, Edmonton, Regina, Saskatoon and Moncton. Material declines were limited to the GVA with a fall of 1.3%, the Fraser Valley down 0.8% and the Okanagan Valley down 0.5%.

By contrast, monthly gains were posted in Barrie at 1.4%, Hamilton up 1.3%, Niagara up 1.2%, Guelph up 1.1%, Ottawa up 0.7%, Greater Montreal up 0.7%, the GTA up 0.6% and Oakville up 0.3%.

Although running close to its 10 year average and up nearly 10% from the six year low reached in February 2019, activity remains well below levels recorded over much of 2015, 2016 and 2017.

Larger monthly gains were generally focused in the province of Quebec and in Southern Ontario. Those gains were offset by declines in a diverse mix of markets across Canada, including Greater Vancouver (GVA), Calgary, Halifax-Dartmouth and the province of Newfoundland and Labrador.

Actual sales activity edged up 0.3% compared to June 2018, with gains in Greater Toronto (GTA) and Montreal offsetting declines in B.C.

There’s a growing divergence in Canadian housing market trends between eastern and western Canada, according to Gregory Klump, CREA’s chief economist. ‘While sales activity in Canada’s three westernmost provinces appears to have stopped deteriorating, it will be some time before supply and demand there becomes better balanced and the outlook for home prices improves,’ he said.

Stable sales and a slight increase in new listings caused the national sales to new listings ratio to ease marginally to 57.1% in June from 57.7% posted in May. This measure remains within close reach of its long-term average of 53.5%.

Based on a comparison of the sales to new listings ratio with the long term average, over 80% of all local markets were in balanced market territory in June 2019, the largest share in over three years.

The number of months of inventory is another important measure of the balance between sales and the supply of listings. There were five months of inventory on a national basis at the end of June 2019. While this is its lowest level since January 2018, this measure of market balance remains within close reach of its long-term average of 5.3 months.

The number of months of inventory has swollen far beyond long term averages in Prairie Provinces and Newfoundland and Labrador, giving home buyers ample choice in these regions. By contrast, the measure remains well below long-term averages in Ontario and the Maritime provinces, resulting in increased competition among buyers for listings and fertile ground for price gains.