National home sales in Canada increased by 4.1% from February to March and the average sales price is also going up but slewed by growth in Vancouver and Toronto, the latest index report shows.
But the data from the Canadian Real Estate Association (CREA) also shows that while the national average sale price rose 9.4% on a year on year basis in March, excluding Greater Vancouver and Greater Toronto, it increased by 2.4%.
March sales were up from the previous month in nearly two thirds of all local markets, led by Greater Vancouver, Fraser Valley, Calgary and Edmonton. Despite the monthly rebound, Calgary and Edmonton sales came in below the 10 year average for the month of March.
‘Low mortgage interest rates are good news for affordability as we head into the spring home buying season. This spring should see buyers coming off the sidelines in places where winter was anything but mild,’ said CREA president Pauline Aunger.
According to Gregory Klump, CREA’s chief economist, Greater Vancouver and the GTA are really the only two hot spots for home sales and prices in Canada at present. ‘Price gains in these two markets are being fueled by a shortage of single family homes for sale in the face of strong demand. Meanwhile, supply and demand for homes is well balanced among the vast majority of housing markets elsewhere across Canada,’ he explained.
Year on year price gains for single family homes in Greater Vancouver and Greater Toronto have exceeded those in other housing markets tracked by the MLS® HPI throughout the first quarter of 2015, the data reveals.
Actual activity in March stood 9.5% above levels reported in March 2014 and slightly above the 10 year average for the month. March sales failed to lift activity recorded during the first quarter above its 10 year average. First quarter sales were below their 10 year average in most local housing markets.
The number of newly listed homes rose 1.8% in March compared to February. The rebound in Greater Toronto more than offset the continuing pullback of new supply in Calgary, where it had climbed sharply toward the end of last year but now stands at a multiyear low.
The national sales to new listings ratio was 53.9% in March, up from 52.7% in February and 50.4% in January. A sales to new listings ratio between 40 and 60% is generally consistent with balanced housing market conditions, with readings above and below this range indicating sellers’ and buyers’ markets respectively. The ratio was within this range in about 60% of all local housing markets in March.
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 6.1 months of inventory on a national basis at the end of February 2015, down from 6.3 months in February and 6.5 months in January. While both the sales to new listings ratio and months of inventory measures have tightened at the national level in the past few months, they remain firmly entrenched in balanced market territory. Moreover, both measures of housing market balance indicate that upward pressure on selling prices is subsiding in an increasing number of local markets.
Single family home sales continue to post the biggest year on year price gains, up 5.83% and led by two story single family homes with growth of 6.66%. By comparison, the rise in selling prices was more modest for townhouse/row units at 4.55%, one story single family homes at 4.41% and apartments at 2.36%.
Price gains varied among housing markets tracked by the index. Greater Toronto was up 7.85% and Greater Vancouver up 7.19%, the biggest year on year increases. This was followed by Calgary at 4.13%, which was a markedly smaller gain compared to those posted last year and the smallest since August 2012.
In other markets tracked by the index, prices were up compared to year ago levels by between 2.5% and 3% in Fraser Valley, Victoria, and Vancouver Island, while remaining little changed in Saskatoon, Ottawa, and Greater Moncton. Prices also ticked up by 0.5% in Greater Montreal, while falling 4% in Regina.
This article was republished with permission from Property Wire.