CREA: National home sales are up but some areas are lagging

CREA: National home sales are up but some areas are lagging

CREA: National home sales are up but some areas are lagging

Canada’s national home sales gained in April as they continued to rebound from the 7 year low posted in February.

But the data from the Canadian Real Estate Association shows that sales are still weaker than in 2018 and many markets are still struggling to make gains.

Of the 3.6% month-over-month national increase through MLS systems in April, around half was due to increased sales in the Greater Toronto Area, although 60% of local markets posted increases.

Actual (not seasonally adjusted) sales activity was up 4.2% year-over-year in April, the first year-over-year gain since December 2017 and the largest in more than two years.

This was driven by gains in the GTA and Montreal that outweighed declines in the BC Lower Mainland.

"Sales activity is stabilizing among Canada's five most active urban housing markets," said Gregory Klump, CREA's Chief Economist. "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 there 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 British Columbia's provincial government."

GTA, Ottawa lead growing supply
Buyers have more choice of homes with supply up nationwide by 2.7% in April following a 3.4% rise in March.

There was increased new supply in about 60% of local markets with the GTA and Ottawa leading. The national sales-to-new listings ratio tightened to 54.8% from 54.3% in March and has remained close to its long-term average of 53.5% since early 2018.

Months of inventory was 5.3 in April, down slightly from the 5.5 months in March. Regionally, the Prairies and Newfoundland & Labrador have elevated levels of inventory while buyers in Ontario and the Maritimes have a tighter selection available.

Prices vary along with supply
The differences in supply across the regions has also affected prices.

The Aggregate Composite MLS Home Price Index appears to be stabilizing, having edged lower by 0.3% year-over-year in April 2019.

Apartment units were again the only property sector to to post a year-over-year gain in benchmark price in April 2019 (0.5%), while two-storey single-family home and townhouse/row unit prices were little changed from April 2018 (-0.3% and -0.2%, respectively). By comparison, one-storey single-family home prices were down by -1.4% year-over-year.

By region:

Results remain mixed in British Columbia, with prices down on a y-o-y basis in Greater Vancouver (GVA; -8.5%) and the Fraser Valley (-4.6%), up slightly in the Okanagan Valley (1%) and Victoria (0.7%), while climbing 6.2% elsewhere on Vancouver Island.