According to statistics released today by The Canadian Real Estate Association (CREA), national home sales activity edged up almost one per cent in July 2014 from the previous month.
Highlights:
- National home sales rose 0.8% from June to July.
- Actual (not seasonally adjusted) activity was 7.2% higher than July 2013 levels.
- The number of newly listed homes edged up 0.4% from June to July.
- The Canadian housing market remains in balanced territory.
- The MLS® Home Price Index (HPI) rose 5.3% year-over-year in July.
- The national average sale price rose 5.0% on a year-over-year basis in July.
The number of home sales processed through the MLS® Systems of Canadian real estate Boards and Associations rose 0.8 per cent on a month-over-month basis in July 2014, marking the sixth consecutive monthly increase and the highest level for sales since March 2010.
Sales activity rose in about 60 per cent of all local housing markets in July, led by gains in Victoria, Winnipeg, London and St. Thomas, and Ottawa together with broadly-based increases in Quebec and New Brunswick.
“On the surface, national sales activity in July was similar to what we saw in May and June,” said CREA President Beth Crosbie. “That said, July sales picked up in markets that struggled to gain traction in the spring, while activity eased slightly in some of Canada’s largest urban markets. As always, all real estate is local and whether you’re looking to buy or sell, your local REALTOR® is your best source of information on all the factors driving the market where you currently live or might like to in the future.”
Actual (not seasonally adjusted) activity in July stood 7.2 per cent above levels reported in the same month last year. July sales were up from year-ago levels in about 70 per cent of all local markets, led by Greater Vancouver and Fraser Valley, the Okanagan region, Calgary, Winnipeg, Greater Toronto, Hamilton-Burlington, London and St. Thomas, and Ottawa.
For the year-to-date, sales activity is up 4.7 per cent compared to the first seven months of 2013 and in line with the 10-year average for the period.
The number of newly listed homes edged up 0.4 per cent in July compared to June. The number of markets where new listings rose was equal to the number where they declined. Regina, Winnipeg, Greater Toronto, Windsor-Essex, Ottawa and Montreal posted the biggest monthly increases in new listings, which offset fewer new listings in Fraser Valley, Calgary and Fredericton.
New listings and sales activity trends have closely tracked each other since February. Many new listings have come on stream in markets with tight supply and continuing demand. As a result, the strength of sales in recent months likely reflects how many properties were snapped up once they finally hit the market following the harsh winter that caused sales and new listings to be deferred.
“Low mortgage interest rates continue to bolster home sales activity,” said Gregory Klump, CREA’s Chief Economist. “With the Bank of Canada widely expected to hold interest rates steady until next year, mortgage financing will remain attractive over the second half 2014 and continue to support Canadian economic growth while waiting for Canadian exports and investment to improve.”
The national sales-to-new listings ratio was 53.6 per cent in July, little changed from 53.4 per cent June and 53.2 per cent in May. This remains firmly entrenched within the range from 40 to 60 per cent that marks balanced market territory. The ratio has remained within short reach of its current level for more than four years, averaging 52.6 per cent since the beginning of 2010.
Just over half of all local markets posted a sales-to-new listings ratio in this range in July. Of the remainder of markets, more than half were sitting above the 60 per cent threshold that marks the border between balanced and seller’s market territory, many of which are found in Alberta and Southern Ontario.
The number of months of inventory is another important measure of the balance between housing supply and demand. It represents the number of months it would take to completely liquidate current inventories at the current rate of sales activity.
There were 6.0 months of inventory nationally at the end of July 2014. This is unchanged from May and June and about half of a month lower compared to where this measure stood at the beginning of the year. As with the sales-to-new listings ratio, the number of months of inventory continues to suggest that Canadian housing markets generally remain well-balanced.
The Aggregate Composite MLS® HPI rose by 5.33 per cent on a year-over-year basis in July. This was little changed from the 5.40 per cent increase recorded in June. Price growth accelerated slightly for single family homes and townhouse/row units while year-over-year growth in apartment prices slowed.
Two-storey single family homes continued to post the biggest year-over-year price gains (+6.32 per cent), followed closely by one-storey single family homes (+5.47 per cent) and townhouse/row units (+5.33 per cent). Price growth for apartment units was comparatively more modest (+3.18 per cent).
Year-over-year price growth varied among local housing markets tracked by the index. As in recent months, the biggest gains were posted by Calgary (+10.48 per cent), Greater Toronto (+7.88 per cent), and Greater Vancouver (+4.44 per cent).
The MLS® Home Price Index (MLS® HPI) provides a better gauge of price trends than is possible using averages because it is not affected by changes in the mix of sales activity the way that average price is.
The actual (not seasonally adjusted) national average price for homes sold in July 2014 was $401,585, up five per cent from the same month last year.
The national average price continues to be skewed upward by sales activity in Greater Vancouver and Greater Toronto, which are among Canada’s largest and most expensive housing markets. Excluding these two markets from the calculation, the average price is a relatively more modest $327,988 and the year-over-year increase shrinks to four per cent.