Statistics released by the Canadian Real Estate Association (CREA) show national home sales recorded over Canadian MLS Systems declined by 2.9 per cent in January 2020.
Transactions were down in a little over half of all local markets in January, with the national result most impacted by a slowdown of more than 18 per cent in the Lower Mainland of British Columbia.
Actual (not seasonally adjusted) sales activity was still up 11.5 per cent compared to January 2019, marking the best sales figures for the month in 12 years. Transactions surpassed year-ago levels in about two-thirds of all local markets, including most of the largest urban markets.
“Home price growth continues to pick up in housing markets where listings are in short supply, particularly in Southern, Central and Eastern Ontario,” said Jason Stephen, president of CREA. “Meanwhile, ample supply across the Prairies and in Newfoundland and Labrador is resulting in ongoing competition among sellers.”
“Looking at local market trends across the country, one thing that stands out in markets with historically tight supply is a larger than normal drop in new listings at this time of the year,” said Shaun Cathcart, CREA’s Senior Economist.
The number of newly listed homes was little changed in January, edging up a slight 0.2 per cent on the heels of a series of declines which have left new listings at a near decade low.
January’s small m-o-m change came as the result of declines in Calgary, Edmonton and Montreal, which were offset by gains in the York and Durham Regions of the Greater Toronto Area (GTA) where new supply bounced back at the start of 2020 following a sharp slowdown towards the end of last year.
With sales down and new listings up slightly in January, the national sales-to-new listings ratio fell back to 65.1 per cent compared to 67.2 per cent posted in December 2019. Even so, the long-term average for this measure of housing market balance is 53.8 per cent.
Based on a comparison of the sales-to-new listings ratio with the long-term average, close to two-thirds of all local markets were in balanced market territory in January 2020. Apart from a few areas of Alberta and Saskatchewan, the remainder were all favouring sellers.
There were 4.2 months of inventory on a national basis at the end of January 2020 – the same as in November and December and the lowest level since the summer of 2007. This measure of market balance is now a full month below its long-term average of 5.2 months. While still just within balanced market territory, its current reading suggests that sales negotiations are becoming increasingly tilted in favour of sellers.
National measures of market balance continue to mask significant and increasing regional variations. The number of months of inventory has swollen far beyond long-term averages in the Prairie provinces and Newfoundland & Labrador.
By contrast, the measure is running well below long-term averages in Ontario, Quebec and the Maritime provinces, resulting in increased competition among buyers for listings and providing fertile ground for price gains. The measure is still in balanced market territory in British Columbia.
The Aggregate Composite MLS Home Price Index (MLS HPI) rose 0.8 per cent in January 2020 compared to December, marking its eighth consecutive monthly gain. It is now up 5.5 per cent from last year’s lowest point in May and has set new records in each of the past six months.
The MLS HPI in January was up from the previous month in 14 of the 18 markets tracked by the index. The actual (not seasonally adjusted) Aggregate Composite MLS (HPI) rose 4.7 per cent y-o-y in January, the biggest year-over-year gain since February 2018.
Home prices in Greater Vancouver (-1.2 per cent) remain slightly below year-ago levels, but declines are still shrinking. Meanwhile, January saw prices back in positive y-o-y territory in the Fraser Valley (+0.3 per cent). Elsewhere in British Columbia, home prices logged y-o-y increases in the Okanagan Valley (+3.5 per cent), Victoria (+3.4 per cent) and elsewhere on Vancouver Island (+4 per cent).
Calgary, Edmonton and Saskatoon continued to post small y-o-y price declines, while the y-o-y gap has now widened to -6.9 per cent in Regina.
In Ontario, home price growth has re-accelerated across most of the GGH, with a number of markets getting close to double digits. Meanwhile, price gains in recent years have continued uninterrupted in Ottawa (+13.7 per cent), Montreal (+9.8 per cent) and Moncton (+6.4 per cent).
All benchmark home categories tracked by the index accelerated further into positive territory on a y-o-y basis, with similar sized gains among the different property types.
Apartment unit prices posted the biggest y-o-y increase (+5 per cent) followed closely by two-storey single family homes (+4.8 per cent), one-storey single-family homes (+4.4 per cent) and townhouse/row units (+4.2 per cent).
The actual (not seasonally adjusted) national average price for homes sold in January 2020 was around $504,350, up 11.2 per cent from the same month the previous year. This was the largest increase since mid-2016.
The national average price is heavily influenced by sales in the GVA and GTA, two of Canada’s most active and expensive housing markets. Excluding these two markets from calculations cuts close to $110,000 from the national average price, trimming it to around $395,000