National home sales in Canada rose by 0.7% from September to October and prices were up 7.1% year on year, according to the latest data from the Canadian Real Estate Association.
It is the sixth consecutive month of stronger resale housing activity compared to a quiet start to the year, and the strongest activity for the month of October since 2009.
‘Low interest rates continued to support sales in some of Canada’s more active and expensive urban housing markets and factored into the monthly increase for national sales,’ said CREA president Beth Crosbie.
‘Even so, sales did not increase in many local markets in Canada, which shows that national and local housing market trends can be very different,’ she added.
According to Gregory Klump, CREA chief economist, while the strength of national sales activity is far from being a Canada-wide phenomenon, it extends beyond Vancouver, Calgary and Toronto.
‘Sales in a number of B.C. markets have started to recover from weaker demand over the past couple of years. They have also been improving across much of Alberta, where interprovincial migration and international immigration are reaching new heights,’ he explained.
Actual (not seasonally adjusted) activity in October stood 7% above levels reported in the same month last year. October sales were up from year ago levels in about 70% of all local markets, led by Greater Vancouver and the Fraser Valley, Victoria, Calgary, and Greater Toronto. Combined sales in these five markets account for almost 40% of national sales activity, and nearly 60% of the year on year increase in national sales.
Actual (not seasonally adjusted) sales activity for the year to date in October was 5.2% above levels in the first 10 months of 2013 and 2.5% above the 10 year average for the same period.
The house price index increased by 5.51% year on year in October. Price gains have held steady between 5% and 5.5% since the beginning of the year.
A breakdown of the data shows that year on year price growth accelerated for two story single family homes, townhouse units and apartment units in October. By contrast, price momentum slowed further for one story single family homes.
Two story single family homes continue to post the biggest year on year price gains at 6.94%, followed closely by townhouses at 5.83%, and one story single family homes at 4.75%. Price growth for apartment units remains comparatively more modest at 3.51%.
Price growth varied among housing markets tracked by the index. As in recent months, Calgary saw the biggest increase at 9.47%, Greater Toronto saw growth of 8.3% and Greater Vancouver was up 6.03%.
Prices were up between 1% and 2.5% year on year in the Fraser Valley, Victoria, and Vancouver Island, flat in Saskatoon, Ottawa, Greater Montreal, and Greater Moncton, and down 3.4% in Regina.
The actual (not seasonally adjusted) national average price for homes sold in October 2014 was $419,699, up 7.1% from the same month last year. The national average price continues to be pulled upward 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 the calculation, the average price is a relatively more modest $330,596 and the year on year increase shrinks to 5.4%.
The number of newly listed homes rose 0.8% in October compared to September. While new supply was down in just over half of all local markets, outsized gains in Greater Vancouver, Calgary, Edmonton, and Greater Toronto boosted the national figure.
The national sales to new listings ratio was 55.7% in October. With sales and new listings having once again moved in tandem, the sales to new listings ratio held steady for the third consecutive month.
A sales to new listings ratio between 40 and 60% is usually consistent with a balanced housing market, with readings above and below this range indicating sellers’ and buyers’ markets respectively. The ratio was within this range in just over half of all local markets in October. About 70% of the remaining markets posted ratios above this range, almost all of which are located in British Columbia, 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 5.8 months of inventory nationally at the end of October 2014. It has held to a narrow range between 5.8 and six months since May of this year. As with the sales to new listings ratio, the number of months of inventory remains well within balanced market territory while pointing to a national market that has become tighter since the beginning of the year, when sales got off to a slow start.
This article was republished with permission from Property Wire.