Statistics released by the Canadian Real Estate Association (CREA) show national home sales and new listings were up noticeably in May 2020 compared to April.
Home sales recorded over Canadian MLS Systems rebounded by a record 56.9 per cent in May 2020; although, that is as a percentage of the weakest month of April on record.
As such, the May gain constituted a return of only a third of the activity lost between February and April, and the May 2020 sales figure was still the lowest level for that month since the mid-1990s.
Transactions were up on a m-o-m basis across the country. Among Canada’s largest markets, sales rose by 53 per cent in the Greater Toronto Area (GTA), 92.3 per cent in Montreal, 31.5 per cent in Greater Vancouver, 20.5 per cent in the Fraser Valley, 68.7 per cent in Calgary, 46.5 per cent in Edmonton, 45.6 per cent in Winnipeg, 69.4 per cent in Hamilton-Burlington and 30.5 per cent in Ottawa.
In most cases, the sizes of the increases listed above were somewhat proportional to the size of declines recorded in April, and because it requires exponentially larger increases to recover from larger declines, some of the markets with the smaller gains in May but also smaller declines in April are currently doing better relative to history.
Actual (not seasonally adjusted) sales activity was still running 39.8 per cent below last May, marking the lowest May sales figure since 1996. Y-o-y declines in the larger markets were clustered in the 40 per cent -50 per cent range.
“REALTORS across Canada are pleased to note increases in home sales and new listings across the country in May,” said Costa Poulopoulos, Chair of CREA. “We continue to help clients stay safe by complying with government directives and advice, and continue using technology to list and show properties, as well as completing all required forms. REALTORS® remain the best source for information and guidance when negotiating the sale or purchase of a home in these extraordinary times,” continued Poulopoulos.
“May’s housing numbers are certainly a mixed bag of results – sales and new listings are both way up month-over-month but still way down compared to year ago,” said Shaun Cathcart, CREA’s Senior Economist. “The big picture is things are moving in the right direction but still have a long way to go. That said, under the surface those numbers have been steadily rising from mid-April right through the first week of June, so June may end up a similar story. With sales and new listings moving down and now back up in tandem, and overall supply still falling, prices appear to be holding firm at this point.”
The number of newly listed homes climbed by a record 69 per cent in May compared to April. As with sales activity, gains were recorded across the country.
With new listings having recovered by more than sales in May, the national sales-to-new listings ratio fell to 58.8 per cent compared to 63.3 per cent posted in April. While this statistic has moved lower, the bigger picture is that this measure of market balance has been remarkably little changed considering the extent to which current economic and social conditions are impacting both buyers and sellers.
There were 5.6 months of inventory on a national basis at the end of May 2020, down from 9 months in April. The temporary jump in this measure recorded in April reflected the fact that sales were expected to fall right away amid lockdowns; whereas, other variables like active listings would be expected to fall at a much slower pace.
The Aggregate Composite MLS Home Price Index (MLS HPI) was unchanged (-0.08 per cent) in May 2020 compared to April.
Of the 19 markets currently tracked by the index, 18 posted either m-o-m increases or smaller decreases compared with April, including 5 that saw a gain in May following a decline in April.
Generally speaking, since the COVID crisis began small declines in prices have been seen in British Columbia while declining trends already in place in Alberta have accelerated. Across the rest of the Prairies, where sales have been doing comparatively much better against history than in much of the country, price trends have actually been stabilizing.
The Greater Golden Horseshoe has generally seen it’s rapidly accelerating prices put into a stall for now, while further east in Ottawa, Montreal and Moncton, prices appear to have been able to continue climbing albeit at a slower pace.
The non-seasonally adjusted Aggregate Composite MLS HPI was still up 5.3 per cent on a y-o-y basis in May.
The actual (not seasonally adjusted) national average price for homes sold in May 2020 was $494,500, down 2.6 per cent from the same month the previous year.
The national average price is heavily influenced by sales in the Greater Vancouver and the GTA, two of Canada’s most active and expensive housing markets. Excluding these two markets from calculations cuts almost $94,000 from the national average price, trimming it to about $401,000.