The Canadian Real Estate Association (CREA) reports that residential real estate sales and prices are up in the country. CREA analysts noted 3.7% year-on-year price increase and a 3.6% jump in sales for the month of May. The sales gains mark the highest increase in more than two years and more activity in the Vancouver market is pulling up the national average. The increased sales are numbers are beginning to outpace listings, which is shortening the inventory and experts believe it’s a good sign that prices will continue to improve since slipping as a result of new mortgage rules. For more on this continue reading the following article from Property Wire.
Residential property sales in Canada increased by 3.6% last month and the national average sales price have gone up by 3.7% year on year.
The latest data from the Canadian Real Estate Association (CREA), shows that momentum in the market is building on gains recorded in the first few months of the year.
The 3.6% increases in sales is the largest monthly gain in almost two and a half years and it has increased national activity almost to where it had been just before new mortgage rules came into force last summer.
Home sales improved in two thirds of all local markets in May. This list encompasses almost all large urban markets including Greater Vancouver, Calgary, Edmonton, Winnipeg, Greater Toronto, Hamilton-Burlington, Kitchener-Waterloo, Ottawa, Montreal and Halifax-Dartmouth.
‘Until recently, mixed sales trends across the country taken together had resulted consistently in a stable national trend. The difference in May was that sales improved in so many markets at the same time,’ said Gregory Klump, CREA’s chief economist.
‘The pop in Canada’s resale housing numbers adds one more to a series of upbeat economic indicators that exceeded expectations in recent weeks. It’s important not to put too much stock in one month’s worth of data, but taken together with other recently published economic gauges, Canadian resale housing market results provide further evidence of the widely anticipated firming trend for Canadian economy,’ he explained.
Actual, not seasonally adjusted, activity came in 2.6% below levels reported in May 2012, with transactions down on a year on year basis in about 60% of local markets.
The number of newly listed homes rose 1.9% month on month in May. New listings were up in about two thirds of all local markets, led by a rebound in non-CMA regions in Quebec, as well as by gains in the Fraser Valley, Edmonton, Winnipeg, and Greater Toronto.
With a larger increase in sales than new listings, the national sales to new listings ratio rose to 51.4% in May compared to 50.6% in April. Klump pointed out that this measure has remained firmly rooted in balanced market territory since early 2010 and has held within short reach of 50% since August 2011. Based on a sales to new listings ratio of between 40 to 60 per cent, two thirds of all local markets were in balanced market territory in May.
The number of months of inventory is another important measure of 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.
Nationally, there were 6.4 months of inventory at the end of May 2013. Klump said that this indicates that the national housing market firmed slightly compared to a reading of 6.6 months at the end of April.
Provinces where the number of months of inventory declined include British Columbia, Alberta, Ontario, Quebec, New Brunswick, and Nova Scotia.
The actual, not seasonally adjusted, national average price for homes sold in April 2013 was $388,910, an increase of 3.7% from the same month last year.
For almost two years now, declining sales activity in Greater Vancouver has exerted a downward pull on the national average sale price. May 2013 marks a departure from that trend, with activity in Greater Vancouver having boosted the national average price for the first time since August 2011.
The Aggregate Composite MLS® HPI rose 2.3% on a year on year basis in May, up marginally compared to the 2.2% increase reported in April. While this interrupted the string of diminishing year on year gains posted over the past 11 months, it was still the slowest rate of price growth in more than two years with the exception of slightly lower readings in March and April 2013.
Year on year price growth advanced for all Benchmark property types tracked by the index. Price gains remained strongest for single family homes, up 2.8%, followed by a rise of 1.9% for town houses and terraced houses and a 1.1% rise for apartments.
This article was republished with permission from Property Wire.