The national housing market continues to slowly recover from the seven-year low it hit in February, with modest improvements in sales on both a yearly and month-over-month basis; the latest data from the Canadian Real Estate Association reports transactions are up 4.2% from the same month in 2018, and up 3.6% from March.
While still below the long-term seasonal average, the board notes that’s the largest sales gain recorded in two years, and the first year-over-year improvement seen since December 2017.
Listings rose 2.7% over the course of the month, while the average home price remained flat, increasing 0.3% to $495,000; removing the Greater Vancouver and Greater Toronto Area markets from the equation would reduce it $391,000.
Sales Trends Uneven Cross Nation
However, CREA notes that sales activity is largely uneven across the country – the vast majority of increases have been in the GTA and Montreal, helping to offset the drastic drop experienced in British Columbia’s Lower Mainland. In fact, the Greater Vancouver Area has officially fallen off the ranking of the country’s hottest city markets, a trend not seen since the 2008 economic downturn.
Stated CREA’s Chief Economist Gregory Klump, “Sales activity is stabilizing among Canada’s five most urban housing markets. That list no longer includes Greater Vancouver, which fell out of the top-five list for the first time since the recession and is well into buyers’ market territory.
“Sales are still trending lower as buyers adjust to a cocktail of housing affordability challenges, reduced access to financing due to the mortgage stress test and housing policy changes implemented by the British Columbia’s provincial government.”
Buyers Can Expect Increased Competition in Most Urban Markets
As is seasonal, new listings were on the uptick in 60% of all markets, rising 2.7% across the nation, and especially in the GTA and Ottawa. However, that increase in new supply was outpaced by growth in sales, which led to slightly tighter market conditions for buyers; the sales-to-new-listings ratio rose to 54.8% from 54.3% in April. That’s still well within balanced territory, though slightly higher than the long-term average of 53.5%.
According to CREA, three quarters of all markets can be considered balanced. The total level of inventory – the length of time it would take to completely sell off all available homes for sale – sat at 5.3 months, slightly shorter than the 5.6 months and 5.5 months recorded in February and March, respectively, reflecting the pickup in sales.
However, while some markets are seeing competition heat up for buyers, others continue to experience considerable oversupply challenges – for example, inventory is much higher than is typical in Prairie markets and in Newfoundland and Labrador, while remaining below average in Ontario and the Maritimes. Conditions in these markets are ripe for heating prices, notes the board.
As has been the long term trend, apartments were the only housing type to post a year-over-year improvement in prices, rising 0.5%. One- and two-storey houses saw prices soften by -0.3% and -1.4%, respectively, while townhouse prices remained relatively flat, down -0.2%.
Home Price Trends by Region
British Columbia: Prices are down significantly for MLS listings in Vancouver, which fell by -8.5%, followed by a -4.6% drop in the Fraser Valley. However, they were generally flat in the Okanagan and Victoria markets, up 1% and 0.7%, respectively, and up 6.2% elsewhere on Vancouver Island.
Ontario: With the exception of the Barrie and District markets which saw prices fall -5.3%, prices were up across the Greater Golden Horseshoe. The strongest growth was seen in Niagara Region, where prices rose 6.2%, followed by Guelph (5.1%), Hamilton-Burlington (4.6%), the Toronto real estate market (3.2%), and Oakville-Milton (2.5%).
The Ottawa market continues to particularly hot, with prices rising 7.8%, and particularly robust activity in the townhouse / rowhouse segment, which rose 11%.
Prairies: Supply remains at stubbornly high levels relative to sales, which has put downward pressure on prices. All cities experienced a decline with Calgary real estate prices dipping -4.6%, Edmonton by -4%, Regina by -4.3%, and Saskatoon by -1.7%. “The home pricing environment will likely remain weak in these cities until demand and supply return to better balance,” states CREA’s report.
Eastern Canada: Home values continue to improve in the hot Greater Montreal market, which rose 6.3%, as well as in Greater Moncton, up 1.8%.