The data from the Canadian Real Estate Association (CREA) shows that sales were down 0.4% from June to July while actual, not seasonally adjusted activity is up 3.4% compared to a year ago.
While the national sales price is strong, when Greater Vancouver and Greater Toronto are removed from the calculation then annual price growth drops to 4.1%.
It is the second consecutive monthly decline in sales activity but CREA pointed out that transactions in May, June and July reached their highest monthly levels in more than five years.
July sales were down from the previous month in about half of all local markets, led by declines in Hamilton-Burlington and in the Durham Region of the Greater Toronto Area (GTA). The monthly decline in sales for these two markets represents a pullback from record levels in June and CREA says it likely reflects an insufficient supply of listings.
By contrast, sales in Newfoundland and Labrador were up the most on a month on month basis, marking a rebound from a quiet month of June for the province.
‘National sales activity remains solid, fuelled by strength in British Columbia and the Greater Toronto Area, where listings are in short supply or trending that way,’ said CREA president Pauline Aunger.
According to Gregory Klump, CREA chief economist, markets elsewhere across Canada are largely well balanced and in some cases have an ample supply of listings. ‘It’s fair to say that the strength of national sales is still a story about two cities, but it’s equally about how trends there are spreading out in their respective provinces,’ he explained.
‘Trends in British Columbia and Ontario have a big influence on the national figures, since they account for about 60 per cent of national housing activity. As a result, the national picture reflects how demand is running high for the short supply of single family homes in and around the GTA while the balance between supply and demand is tightening in B.C.’s Lower Mainland. These remain the only places in Canada where home prices are growing strongly,’ he added.
Actual, not seasonally adjusted, sales were up from year-ago levels in just over half of all local markets, led by the Lower Mainland region of British Columbia and the GTA. While Calgary continued to post the largest year on year declines in sales compared to last year’s record levels, activity there is nonetheless running roughly in line with five and 10 year averages for sales during the month of July.
The number of newly listed homes was little changed, up 0.2% in July compared to June, marking the fourth consecutive month in which new listings have held steady. New supply was up in a little more than half of all local markets, led by rebounds in Calgary and Edmonton which offset a small step down in the GTA.
The national sales to new listings ratio was 56.8% in July, down slightly from 57.1% in June. The measure has closely tracked the trend for sales this year as new supply has remained stable.
A sales to new listings ratio between 40% and 60% is generally consistent with balanced housing market conditions, with readings above and below this range indicating sellers’ and buyers’ markets, respectively.
The ratio was within this range in about half of local housing markets in July. About one-third of all local markets breached the 60% threshold in July, comprised mostly of markets in British Columbia together with those in and around the Greater Toronto Area.
The number of months of inventory is another important measure of the balance between housing supply and demand. It represents the number of months it would take to completely liquidate current inventories at the current rate of sales activity.
There were 5.6 months of inventory on a national basis at the end of July 2015, unchanged from the previous two months and a three year low for the measure. The national balance between supply and demand has tightened since the beginning of the year as rising sales have drawn down on overall supply.
The index also shows that year on year price growth picked up in July for all home types tracked by the index. Two storey single family homes continued to post the biggest year on year price gains of 8.16% with comparatively more modest increases for one storey single family homes of 4.88%, while townhouse/row units increased by 4.49% and apartment by 2.96%.
