Nationally home sales in Canada have increased for the fourth month in a row, up 3.1% from April to May and prices are up 8.1% year on year.
Actual, not seasonally adjusted, activity is now 2.7% above May 2014 levels although the he number of newly listed homes was little changed from April to May, according to the latest index data from the Canadian Real Estate Association.
CREA said that the Canadian housing market remains balanced overall put national figures are being skewed by exceptional prices in Greater Vancouver and Greater Toronto. If these are excluded than the year on year price increase is just 2.4%.
The data shows that national sales activity is at its highest level in more than five years and transactions were up from the previous month in about 60% of all local markets, led by increases in the Greater Toronto Area, Calgary, Edmonton, Ottawa and Montreal.
One factor that could be responsible for the sales growth, however, is that “mortgage default insurance premiums increased at the beginning of June and this may have encouraged buyers to complete in May top beat the rise.
Year on year price growth accelerated in May in all home categories tracked by the index with the exception of one storey single family homes. Two storey single family homes continue to post the biggest year on year price gains with a rise of 7.18% while the price of one storey single family homes increased by 4.11%, townhouse/row units by 4.09% and apartments by 2.91%.
Annual price growth varied among housing markets tracked by the index. Greater Vancouver saw the biggest rise at 9.41% followed by Greater Toronto at 8.9%. Fraser Valley, Victoria, and Vancouver Island all recorded year on year gains of about 4% in May.
The data also shows that price gains in Calgary continued to slow, with a year on year increase of just 1.21% in May. This was the smallest gain in more than three years and the eleventh consecutive monthly slowdown in year on year price growth. Elsewhere, prices held steady in Saskatoon and Ottawa, rose slightly in Greater Montreal and fell by about 3% in Regina and Greater Moncton.
CREA chief economist Gregory Klump pointed out that sales in and around the Greater Toronto area played a major role in the monthly increase in May sales. ‘At the same time, the rebound in sales over the past few months in Calgary and Edmonton suggests that heightened uncertainty among some home buyers in these housing markets may be easing,’ he said.
The number of newly listed homes was virtually unchanged, down 0.2% in May compared to April. The CREA report says that this reflects an even split between housing markets where new listings rose and where they fell, with little monthly change for new listings in most of Canada’s largest and most active urban markets.
The national sales to new listings ratio was 57.6% in May, up from a low of 50.4% in January when it reached its most balanced point since March 2013. The ratio has risen steadily along with sales so far this year as new supply has remained little changed. 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 half of local housing markets in May. About a third of local markets were above the 60% threshold in May, comprised mostly of markets in and around the Greater Toronto Area and markets in British Columbia.
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.
The national balance between supply and demand has tightened since the beginning of the year, when buyers had more negotiating power than they had in nearly two years. There were 5.6 months of inventory on a national basis at the end of May 2015, its lowest reading in three years.
This article was republished with permission from Property Wire.