Sales and prices fall in Canada, latest index shows

Property sales and prices are falling in Canada with the latest index showing transactions down by 11.9% and values by 0.3% year on year.

Month on month sales were down by 2.1% compared to June 2017, the fourth monthly fall in a row and while this was about a third the magnitude of those in May and June, it leaves sales activity 15.3% below the record set in March, the data from the Canadian Real Estate Association (CREA) shows.

The actual, not seasonally adjusted, national average price for homes sold in July 2017 was $478,696, the first year on year decline since February 2013, reflecting fewer sales in the GTA and Greater Vancouver on a year on year basis.

Sales were down from the previous month in close to two thirds of all local markets, led by the Greater Toronto Area (GTA), Calgary, Halifax-Dartmouth and Ottawa while year on year they were down in about 60% of all local markets, led by the GTA and nearby markets.

‘July’s interest rate hike may have motivated some homebuyers with pre-approved mortgages to make an offer. Even so, sales activity continued to soften in the Greater Golden Horseshoe region. Meanwhile, sales and prices in Montreal continue to strengthen,’ said CREA president Andrew Peck.

Gregory Klump, CREA’s chief economist believes that sales may be starting to bottom out amid stabilising housing market sentiment. ‘Time will tell whether that’s indeed the case once the transitory boost by buyers with pre-approved mortgages fades,’ he said.

The number of newly listed homes slipped further by 1.8%, led by the GTA. Many other markets in the Greater Golden Horseshoe region have also seen new supply pull back recently after having jumped immediately following the Ontario government’s announcement of its Fair Housing Plan in late April.

New listings were also down in Calgary, Edmonton, Montreal and northern British Columbia, with the lattermost region having been hit by wildfires.

With sales down by about the same amount as new listings in July, the national sales to new listings ratio was little changed at a well-balanced 53.5%. By contrast, the ratio was in the high 60% range in the first quarter of 2017.

Price gains diminished in all housing categories, led by single family homes. Apartment units posted the largest year on year gains in July with a rise of 20%, followed by townhouse/row units up 15.9%, two storey single family homes up 10.7% and one-storey single family homes up 9.7%.

After having dipped in the second half of last year, prices in the Lower Mainland of British Columbia have recovered and are now at new highs with Greater Vancouver up 8.7% and Fraser Valley up 14.8%.

Price growth slowed on an annual basis in Greater Toronto, Oakville-Milton and Guelph but remain well above year ago levels, up 18.1% in Greater Toronto, up 12.7% in Oakville-Milton and up 23% in Guelph.

Calgary prices increased by 1.1%, in Regina they increased by 3.6% and in Saskatoon they were down by 2.2%. They were up 5.8% in Ottawa, 4.9% in Greater Montreal and up 5.4% in Greater Moncton.