Canada real estate trends are indicating a month-over-month decline in home sales, according to December 2019 housing data released by the Canadian Real Estate Association (CREA). CREA’s release reports national home sales fell by 0.9 per cent in December 2019 compared to the month prior, “ending a streak of monthly gains that began last March.”
At the local level, CREA’s data reveals an almost-even split between housing markets were home sales rose versus where they waned. An increase in home sales in BC’s Lower Mainland, Calgary and Montreal offset decreases in the Greater Toronto Area (GTA) and Ottawa.
The month-over-month dip in Canadian home sales reflects a 1.8-per-cent decline in new listings compared to the previous month. Housing supply levels are now among the lowest seen in the last decade, largely driven by a decline in new listings in the GTA and Ottawa.
On a national basis, there were 4.2 months of inventory at the end of December 2019 – the lowest level since 2007 and below the long-term average of 5.3 months. This is still considered to be balanced market territory, however CREA suggests that sales negotiations are increasingly leaning in favour of sellers.
In lock-step with declines in housing inventory and sales, home prices trended up in December 2019, with the MLS Home Price Index (HPI) increasing by 0.8 per cent month-over-month and rising 3.4 per cent year-over-year.
On a year-over-year basis, the national average sale price of homes increased 9.6 per cent and transactions were up 22.7 per cent. Sales rose across most of the country, including in all of Canada’s largest urban markets.
The actual national average price for homes sold in December 2019 was $517,000. This average price is heavily influenced by Canada’s priciest housing markets of the GTA and Greater Vancouver Area. Removing these markets from the calculation trims the average price to about $400,000 and reduces the year-over-year average price increase to 6.7 per cent.
“Home price growth is picking up in housing markets where listings are in short supply,” said CREA president Jason Stephen. “Meanwhile, the mortgage stress test continues to sideline potential homebuyers where supply is ample.”
“The momentum for home price gains picked up as last year came to a close,” adds CREA’s Chief Economist Gregory Klump. “If the recent past is prelude, then price trends in British Columbia, the GTA, Ottawa and Montreal look set to lift the national result this year, despite the continuation of a weak pricing environment among housing markets across the Prairie region.”
Looking at long-term sales trends, national activity currently sits 18 per cent above the six-year trough reached in February 2019, but falls seven per cent short of peak levels reached in 2016 and 2017.
Here are some regional highlights at the regional level, from CREA’s release:
Home prices in Greater Vancouver (-3.1 per cent) and the Fraser Valley (-2 per cent) remain below year-ago levels, but declines are shrinking. Elsewhere in British Columbia, home prices logged y-o-y increases in the Okanagan Valley (+4.2 per cent), Victoria (+2.3 per cent) and elsewhere on Vancouver Island (+4.2 per cent).
Calgary, Edmonton and Saskatoon posted year-over-year price declines of around -1 per cent to -2 per cent, while the gap has widened to -4.6 per cent in Regina.
Ontario & Atlantic Region
Home price growth has re-accelerated well above consumer price inflation across most of the Greater Golden Horseshoe. Meanwhile, price gains in recent years have continued uninterrupted in Ottawa, Montreal and Moncton.
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