Home sales were up slightly nationwide for the month of March, but remain well below levels recorded from a year ago, according to statistics released today by the Canadian Real Estate Association (CREA).
More importantly, the Home Price Index for March rose only 2.2 per cent – its smallest gain in more than two years.
“National sales have been holding fairly stable since last summer,” says CREA President Laura Leyser. “We’ll be watching closely as the spring market picks up to see whether the March sales increase marks the beginning of an improving trend.”
Home sales rose 2.4 per cent from February to March of this year, but actual activity for March compared to the same month a year ago were 15.3 per cent below the 2012 levels.
New listings were up 3.2 per from February to March, with average sale prices up 2.5 per cent from compared to March 2012.
CREA attributes the sluggish March sales numbers to the Easter holiday and the loss bank days due to an extra full weekend at the end of the month – known as the “trading day effect.”
“Easter and trading day factors combined effectively to cut March sales short,” says Gregory Klump, CREA’s chief economist. “Activity in the months ahead will reveal whether the monthly improvement in seasonally adjusted March sales reflects technical seasonal adjustment factors or a fundamental improvement in demand.”
Home sales improved in more than half of all local markets from February to March, led by gains in Greater Vancouver, Fraser Valley, Calgary, Greater Toronto, Montreal, Saskatoon, Hamilton-Burlington, and Kitchener-Waterloo.
“That said, the factors that crimped March sales this year were not in play for the same month last year, resulting in speculation that the gap between sales activity this March and March of last year would be bigger than it was in February,” says Klump. “That the gap in fact improved marginally speaks to the resilience of housing demand in Canada.”
Actual (not seasonally adjusted) activity came in 15.3 per cent below levels reported in March 2012, compared to a year-over-year decline in February sales of 15.9 per cent. Although transactions remained down from year-ago levels in more than 90 per cent of all local markets, the gap diminished in a number of large urban markets, including Greater Vancouver, Calgary, Regina, Saskatoon, Montreal, and Quebec City. As was the case in February, Edmonton was the only large urban market in which monthly sales surpassed year-ago levels.
“Analysis will likely continue to focus on how sales remain down from last year, but this shouldn’t come as a surprise given that mortgage regulations and lending guidelines at that time were yet to be tightened,” says Klump. “Since those factors came into force, national home sales have held fairly steady, notwithstanding the rise in seasonally adjusted March sales.”