Sales increased month on month in Canada in January but are below a year ago

Property sales on a national level increased in Canada in January 2019 month on month but they remained below levels recorded one year ago, the latest index shows.

Overall sales increased by 3.6% from December 2018 but are 4% below the same period in 2018 while the national average sales price fell by 5.5% in January and were up 3.6% year on year.

The data from the Canadian Real Estate Association (CREA) also shows The actual, not seasonally adjusted, national average price for homes sold in January 2019 was just under $455,000 but this is heavily skewed by sales in Greater Vancouver and the GTA, two of Canada’s most active and expensive markets. Excluding these two markets takes the national average price to just over $360,000.

The number of homes trading hands was up from the previous month in half of all local markets, led by Montreal, Ottawa and Winnipeg but overall it was the weakest January for sales since 2015.

Sales were also below the 10 year average for the month on a national basis and in Canada’s three westernmost provinces, Ontario and Newfoundland and Labrador.

‘Sales, market balance and home price trends are out of synch among major Canadian cities that have the greatest impact on national results,’ said Gregory Klump, CREA’s chief economist.

‘It’s clear that housing market conditions remain weaker in the Prairie region and the Lower Mainland of British Columbia. Notwithstanding the intended consequences, tighter mortgage regulations that took effect in 2018 combined with previous tightening will weigh on economic growth this year,’ he added.

The number of newly listed homes edged up 1% in January, led by a jump in new supply in Greater Vancouver and Hamilton-Burlington and with sales up by more than new listings, the national sales to new listings ratio tightened to 56.7% compared to 55.3% posted in December. This measure of market balance has remained close to its long term average of 53.5% for the last year.

There were 5.3 months of inventory on a national basis at the end of January 2019, in line with its long term average. That said, the well-balanced national reading masks significant regional differences.

The number of months of inventory has swollen far above its long term average in Prairie provinces and Newfoundland and Labrador; as a result, homebuyers there have an ample choice of listings available for purchase. By contrast, the measure remains well below its long-term average in Ontario and Prince Edward Island, consistent with seller’s market conditions. In other provinces, sales and inventory are more balanced.

Apartment units recorded the largest annual price increase in January with a rise of 3.3%, followed by townhouse/row units up 1.5%. By comparison, two storey single family home prices were little changed with a marginal increase of 0.1% while one storey single family home prices fell 1.1%.

Trends continue to vary widely among the 17 housing markets tracked by the index. In British Columbia prices were down year on year by 4.5% in Greater Vancouver and by 0.8% in the Fraser Valley. Prices increased by 4.2% in Victoria and by 9.3% elsewhere on Vancouver Island.

Among Greater Golden Horseshoe housing markets prices increased by 7.2% in Guelph, by 7% in the Niagara Region, by 5% in Hamilton-Burlington, by 3.9% in Oakville-Milton and by 2.7% in the GTA. Prices fell by 2.7% in Barrie and District.

Across the Prairies, supply is historically elevated relative to sales, and prices fell by 3.9% in Calgary, by 2.9% in Edmonton, by 3.8% in Regina and by 2% in Saskatoon. CREA expects that the market will likely remain weak in these cities until elevated supply is reduced.

Prices rose by 7.1% in Ottawa, led by a 9.5% increase in townhouse/row unit prices, by 6.3% in Greater Montreal, led by a 9.2% increase in townhouse/row unit prices, and by 1% in Greater Moncton, led by a 15.1% increase in townhouse/row unit prices.