The Canadian Real Estate Association‘s (CREA) recent statistics, recorded by the Canadian MLS Systems, reveal a rise in national home sales by 1.9 per cent in May 2019. With monthly gains in March and April, activity in May reached the highest level since January 2018, and sales stood at 8.9 per cent above the six-year low reached in February 2019.
In comparison to May 2018, non-seasonally adjusted sales activity marked the largest y-o-y gain by 6.7 per cent since the summer of 2016.
Canadian MLS Systems states that the national increase was dominated by improving sales trends in the GTA, which accounted for close to half of the overall increase.
The CREA’s updated Resale Housing Market Forecast report national home sales are now projected to edge up 1.2 per cent to 463,000 units in 2019.
“The mortgage stress-test continues to present challenges for home buyers in housing markets where they have plenty of homes to choose from but are forced by the test to save up a bigger down payment,” said Gregory Klump, CREA’s Chief Economist. “Hopefully the stress-test can be fine tuned to enable home buyers to qualify for mortgage financing sooner without causing prices to shoot up.”
The number of newly listed homes edged back by 1.2 per cent in May, while the national sales-to-new listings ratio tightened to 57.4 per cent, compared to 55.7 per cent in April.
Based on a comparison of the sales-to-new listings ratio with the long-term average, almost three-quarters of all local markets were in balanced market territory in May 2019.
There were 5.1 months of inventory on a national basis at the end of May 2019, down from 5.3 in April and 5.6 months back in February
The number of months of long-term average inventory has inflated in Prairie Provinces and Newfoundland & Labrador, while the measure remains well below long-term averages for Ontario and Maritime provinces.
According to the Canadian MLS Systems, the Aggregate Composite MLS HPI edged down 0.2 per cent in May 2019 on a seasonally adjusted basis, and stood 1.4 per cent below the peak reached in December 2018.
Seasonally adjusted MLS HPI readings in May were up from the previous month in 12 of the 18 markets tracked by the index; however, according to the CREA, home price declines in the Lower Mainland of British Columbia contributed to the monthly decline of 13.3 per cent — marking a small upward revision from the previously forecast decline of 14.9 per cent.
Markets where prices rose in May from the month before include Victoria (0.5 per cent), Edmonton (0.2 per cent), Saskatoon (0.4 per cent), Ottawa (0.7 per cent), Niagara (0.2 per cent), Oakville (0.8 per cent), Guelph (0.5 per cent), Barrie (3.6 per cent), Montréal (0.5 per cent) and Greater Moncton (0.5 per cent), with gains of 0.1 per cent in the GTA and Regina.
Readings were down from the month before in markets such as the GVA by -1.0 per cent, the Fraser Valley at -1.1 per cent, the Okanagan Valley sitting at -1.3 per cent, Calgary holding -0.1 per cent, and Hamilton at -0.7 per cent.
The actual Aggregate Composite MLS Home Price Index (MLS HPI) hit its largest decline in almost a decade by -0.6 per cent y-o-y in May 2019.
All benchmark property categories tracked by the index posted y-o-y declines in May 2019. Townhouse/row and apartment unit prices edged back by 0.2 per cent, two-storey single-family home prices were down 0.5 per cent y-o-y, and one-storey single-family home prices fell 1.7 per cent y-o-y.
Results remain mixed in British Columbia’s housing markets, with prices down on a y-o-y basis in the GVA (-8.9 per cent, the Fraser Valley (-5.9 per cent) and the Okanagan Valley (-0.7 per cent) according to MLS HPI. Meanwhile, prices edged up 1 per cent in Victoria and climbed 4.7 per cent elsewhere on Vancouver Island.
Among Greater Golden Horseshoe housing markets tracked by the index, MLS HPI benchmark home prices were up from year-ago levels in Guelph (+5.7 per cent), the Niagara Region (+5.4 per cent), Hamilton-Burlington (+3.4 per cent), Oakville-Milton (+3.4 per cent) and the GTA (+3.1 per cent). By contrast, home prices in Barrie and District held below year-ago levels (-6.1 per cent).
Across the Prairies, supply remains historically elevated relative to sales and home prices remain below year-ago levels. Benchmark prices were down by 4.3 per cent in Calgary, 3.6 per cent in Edmonton, 3.9 per cent in Regina and 1.3 per cent in Saskatoon. The home pricing environment will likely remain weak in these cities until demand and supply return to better balance.
Led by a 12.2 per cent increase in townhouse row unit prices, home prices in Ottawa rose 8 per cent y-o-y, in Greater Montréal prices rose by 6.3 per cent (led by a 7.6 per cent increase in apartment unit prices), and 2 per cent in Greater Moncton (led by a 15.9 per cent increase in apartment unit prices).
The non-seasonally adjusted national average price for homes sold in May 2019 was close to $508,000, up 1.8 per cent from the same month in 2018.
The national average price is heavily influenced by sales in the GVA and GTA, which according to Canadian MLS Systems, is two of Canada’s most active and expensive housing markets.
The CREA reports that average price trends across Canada in 2020 are generally expected to be more moderate versions of those in 2019.
With small declines in British Columbia, Alberta, Saskatchewan and Newfoundland and Labrador, and modest gains in all provinces from Manitoba through the Maritimes, the national average price is forecast to edge up by 0.9 per cent to around $490,000 in 2020, according to the CREA.