Ottawa, Ontario, September 18, 2019 — Canadian national home sales were up in August, according to statistics, released on Monday, by The Canadian Real Estate Association (CREA).
Home sales, recorded via Canadian MLS® Systems, advanced for the sixth consecutive month in August, and transactions are now running almost 17 percent above the six-year low reached in February 2019, but remain about 10 percent below highs reached in 2016 and 2017.
Activity was up in slightly more than half of all local markets, although monthly changes were generally modest across most of the country. Gains were led by a record-setting August in Winnipeg and a further improvement in the Fraser Valley. Moncton posted the biggest monthly decline in sales, returning to more normal levels, after having recently jumped to record heights.
Actual (not seasonally adjusted) sales activity was up 5 percent from where it stood in August 2018. The number of homes that traded hands was up from year-ago levels in most of Canada’s largest urban markets, including the Lower Mainland of British Columbia, Calgary, Winnipeg, the Greater Toronto (GTA), Ottawa and Montreal.
“The recent marginal decline in the benchmark five-year interest rate, used to assess homebuyers’ mortgage eligibility, together with lower home prices in some markets, means that some previously sidelined homebuyers have returned,” said Gregory Klump, CREA’s Chief Economist. “Even so, the mortgage stress-test will continue to limit homebuyers’ access to mortgage financing, with the degree to which it further weighs on home sales activity continuing to vary by region.”
The number of newly listed homes rose 1.1 percent in August. With sales and new supply up by similar magnitudes, the national sales-to-new listings ratio was 60.1 percent—little changed from July’s reading of 60.0 percent. The measure has risen above its long-term average (of 53.6 percent) in recent months, which indicates a tighter balance between supply and demand and a growing potential for price gains.
The number of months of inventory is another important measure of the balance between sales and the supply of listings. It represents how long it would take to liquidate current inventories at the current rate of sales activity.
There were 4.6 months of inventory on a national basis at the end of August 2019 – the lowest level since December 2017. This measure of market balance has been increasingly retreating below its long-term average (of 5.3 months).
The Aggregate Composite MLS® Home Price Index (MLS® HPI) rose 0.8 percent month-over-month (m-o-m) last month, the largest increase in over 2 years.
Seasonally adjusted MLS® HPI readings in August were up from the previous month in 14 of the 18 markets tracked by the index, marking the biggest dispersion of monthly price gains since last March.
In recent months, home prices have generally been stabilizing in British Columbia and the Prairies, a measure which had been falling until recently. Meanwhile, price growth has begun to rebound among markets in the Greater Golden Horseshoe (GGH) region amid ongoing price gains in housing markets east of it.
A comparison of home prices to year-ago levels yields considerable variations across the country, with declines in western Canada and price gains in eastern Canada.
The actual (not seasonally adjusted) home price index was up 0.9 percent y-o-y in August 2019. This marks the second consecutive month in which prices climbed above year-ago levels and the largest y-o-y increase since the end of last year.
All benchmark home categories tracked by the index returned to positive year-over-year (y-o-y) territory in August. Two-storey single-family home prices were up most, rising 1.2 percent y-o-y; one-storey single family home prices rose 0.7 percent y-o-y; while townhouse/row and apartment unit edged up 0.3 percent and 0.5 percent, respectively.
The actual (not seasonally adjusted) national average price for homes sold in August 2019 was around $493,500, up almost 4 percent from the same month last year.