Sales in the residential market in Canada down 2.3% month on month

Sales in the residential property market in Canada have continued to fall, down by 2.3% month on month in November and now 12.6% lower than a year ago.

The national average price also fell by 2.9% year on year to $488,000, the data from the Canadian Real Estate Association (CREA) also shows.

The national average price is heavily skewed by sales in Greater Vancouver and the GTA, two of Canada’s most active and expensive markets. Excluding these two markets from calculations cuts almost $110,000 from the national average price, trimming it to just over $378,000.

While the number of homes selling is still up from its low point in the spring, it remains below monthly levels recorded from 2014 through 2017 and sales fell in just over half of all local markets, with lower activity in the Greater Toronto Area (GTA), the Greater Vancouver Area (GVA) and Hamilton-Burlington offsetting increased sales in Edmonton.

‘National sales activity has lost a bit of momentum over the past couple of months, but local market trends can be, and very often are, different by comparison,’ said CREA president Barb Sukkau.

According to Gregory Klump, CREA’s chief economist, the decline in home ownership affordability caused by this year’s new mortgage stress-test remains very much in evidence and despite supportive economic and demographic fundamentals, national home sales have begun trending lower.

‘While national home sales were anticipated to recover in the wake of a large drop in activity earlier this year due to the introduction of the stress-test, the rebound appears to have run its course,’ he said.

The index also shows that the number of newly listed homes fell by 3.3% between October and November, with new supply declining in roughly 70% of all local markets.

There were 5.4 months of inventory on a national basis at the end of November 2018. While this remains in line with its long term average of 5.3 months, the number of months of inventory is well above its long term average in the Prairie Provinces as well as in Newfoundland and Labrador.

By contrast, the measure is well below its long term average in Ontario, New Brunswick and Prince Edward Island. In other provinces, sales and inventory are more balanced.

A breakdown of the figures shows that prices rose 6.6% year on year in Ottawa, led by a 7.3% increase in two storey single family home prices, up 6.2% in Greater Montreal, led by a 9.4% increase in townhouse/row unit prices, and up 4.2% in Greater Moncton, led by an 11.2% increase in townhouse/row unit prices.