Home sales across Canada increased in April month on month for the third time a row, according to the latest data from the Canadian Real Estate Association.
Sales were up 2.3% from March to April but actual, not seasonally adjusted activity was 10% above levels a year ago while the CREA home price index increased 4.97% year on year.
The data also shows that the national average sale price rose 9.5% on a year on year basis in April but excluding Greater Vancouver and Greater Toronto, it increased by 3.4%.
April sales were up from the previous month in two thirds of all local markets, led by the Greater Toronto Area, the surrounding Golden Horseshoe region, and Montreal.
‘As expected, low mortgage interest rates and the onset of spring ushered many home buyers off the sidelines, particularly in regions where winter was long and bitter,’ said CREA president Pauline Aunger.
Gregory Klump, CREA chief economist, pointed out that in recent years, the seasonal pattern for home sales and listings has become amplified in places where listings are in short supply relative to demand.
‘This particularly stands out in and around Toronto. Sellers there have increasingly delayed listing their home until spring. Once listed, it sells fairly quickly. Sales over the year as a whole in Southern Ontario are likely being constrained to some degree by a short supply of single family homes,’ he said.
‘However, the busy spring home buying and selling season has become that much busier as a result of sellers waiting until winter has faded before listing,’ he added.
A breakdown of the figures shows that sales were up on a year on year basis in about 70% of all local markets, led by activity in the Lower Mainland of British Columbia, Greater Toronto, and Montreal. Of the 18 local markets that set new records for the month of April, all but two are in Southern Ontario.
The number of newly listed homes was virtually unchanged, up 0.1% in April compared to March. Below the surface, new supply rose in almost two thirds of all local markets, led by a big rebound in Halifax-Dartmouth following a sharp drop in March.
This was offset by declines in Greater Vancouver, Victoria, and the Okanagan Region, as well as by a continuing pullback in new supply in Calgary. New listings in Calgary have dropped by a third from their multi-year high at the end of last year to their current multi-year low.
The national sales to new listings ratio was 55.3% in April, up from 50.4% three months earlier as the ratio has steadily risen along with sales so far this year. 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 the majority of local housing markets in April.
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 5.9 months of inventory on a national basis at the end of April 2015, down from 6.1 months in March and 6.5 months at the end of January when it reached the highest level in nearly two years.
Year on year price growth accelerated in April for apartment units and two story single family homes, while decelerating for townhouse/row units and one story single family homes.
Single family home sales continue to post the biggest year on year price gains with growth of 5.84%, led by two story single family homes up 6.89%. By comparison, the rise in selling prices was more modest for one story single family homes at 4.2%, townhouse/row units at 3.87% and apartments at 2.6%.
Price gains varied among housing markets tracked by the index. For the third consecutive month, Greater Vancouver with an increase of 8.5% and Greater Toronto at 8.43% posted the biggest year on year price increases. By comparison, Fraser Valley, Victoria, and Vancouver Island recorded gains in the range between 2.7% and 4%.
Price growth in Calgary continued to slow, with a year on year increase of just 2.21% in April, the smallest gain in three years and the tenth consecutive month for which the gain diminished.
Prices remained stable on a year on year basis in Saskatoon and Ottawa, while rising slightly in Greater Montreal, dipping slightly in Greater Moncton, and falling in Regina.
The MLS® Home Price Index is regarded as providing 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 April 2015 was $448,862, up 9.5% year on year but the national average home price continues to be upwardly distorted by sales activity in Greater Vancouver and Greater Toronto, which are among Canada’s most active and expensive housing markets. Excluding these two markets from calculations, the average price is a more modest $339,893 and the year on year gain shrinks to 3.4%.
This article was republished with permission from Property Wire.