Canadian home sales hold steady in June

Ottawa, ON, July 15, 2019 – Statistics released today by the Canadian Real Estate Association (CREA) show national home sales were little changed in June 2019 from the previous month.

Highlights:

• National home sales edged back 0.2% month-over-month (m-o-m) in June.
• Actual (not seasonally adjusted) activity ticked up 0.3% year-over-year (y-o-y).
• The number of newly listed homes rose 0.8% m-o-m.
• The MLS® Home Price Index (HPI) climbed 0.3% m-o-m in June but was down 0.3% y-o-y.
• The actual (not seasonally adjusted) national average sale price was up 1.7% y-o-y.

Home sales recorded via Canadian MLS® Systems were little changed in June 2019 following a string of monthly gains recorded in March, April and May. Although running close to its 10-year average and up nearly 10% from the six-year low reached in February 2019, activity remains well below levels recorded over much of 2015, 2016 and 2017. (Chart A)

The nearly unchanged national tally in June was the result of an even split between the number of local markets where sales were up and those where they were down. Larger monthly gains were generally focused in the province of Quebec and in Southern Ontario. Those gains were offset by declines in a diverse mix of markets across Canada, including Greater Vancouver (GVA), Calgary, Halifax-Dartmouth and the province of Newfoundland and Labrador.

Actual (not seasonally adjusted) sales activity edged up 0.3% compared to June 2018, with gains in Greater Toronto (GTA) and Montreal offsetting declines in B.C.

“Sales activity is strong in New Brunswick where I do business, but it’s a very different story in B.C., Alberta and Saskatchewan,” said Jason Stephen, CREA’s President. “All real estate is local. Nobody knows that better than a professional REALTOR®, who is your best source for information and guidance when negotiating the sale or purchase of a home,” said Stephen.

“There’s a growing divergence in Canadian housing market trends between eastern and western Canada,” said Gregory Klump, CREA’s Chief Economist. “While sales activity in Canada’s three westernmost provinces appears to have stopped deteriorating, it will be some time before supply and demand there becomes better balanced and the outlook for home prices improves.”

The number of newly listed homes edged up 0.8% in June. Stable sales and a slight increase in new listings caused the national sales-to-new listings ratio to ease marginally to 57.1% in June from 57.7% posted in May. This measure remains within close reach of its long-term average of 53.5%.

Considering the degree and duration to which market balance readings are above or below their long-term averages is the best way of gauging whether local housing market conditions favour buyers or sellers. Market balance measures that are within one standard deviation of their long-term average are generally consistent with balanced market conditions.

Based on a comparison of the sales-to-new listings ratio with the long-term average, over 80% of all local markets were in balanced market territory in June 2019, the largest share in over three years.

The number of months of inventory is another important measure of the balance between sales and the supply of listings. It represents how long it would take to liquidate current inventories at the current rate of sales activity.

There were 5 months of inventory on a national basis at the end of June 2019. While this is its lowest level since January 2018, this measure of market balance remains within close reach of its long-term average of 5.3 months.

While national measures of market balance are currently close to their long-term averages, which indicates a good balance between supply and demand, there are significant regional variations.

The number of months of inventory has swollen far beyond long-term averages in Prairie provinces and Newfoundland & Labrador, giving homebuyers ample choice in these regions. By contrast, the measure remains well below long-term averages in Ontario and the Maritime provinces, resulting in increased competition among buyers for listings and fertile ground for price gains.

Although the seasonally adjusted Aggregate Composite MLS® HPI rose 0.3% in June 2019 from the month before, it was still running 1.1% below the peak reached in December 2018. Looking past monthly variations, the overall trend has remained stable since March amid divergent regional trends. (Chart B)

Seasonally adjusted MLS® HPI readings in June were up from the previous month in 9 of the 18 markets tracked by the index, with virtually all of the gains recorded in housing markets east of the Prairie region.

Prices were flat on a m-o-m basis on Vancouver Island and in Calgary, Edmonton, Regina, Saskatoon and Moncton. Material declines were limited to the GVA (-1.3%), the Fraser Valley ( 0.8%) and the Okanagan Valley (-0.5%).

By contrast, monthly gains were posted in Barrie (+1.4%), Hamilton (+1.3%), Niagara (+1.2%), Guelph (+1.1%), Ottawa (+0.7%), Greater Montreal (+0.7%), the GTA (+0.6%) and Oakville (0.3%).

The actual (not seasonally adjusted) Aggregate Composite MLS® Home Price Index (MLS® HPI) edged down by -0.3% y-o-y in June 2019. For the second month in a row, all benchmark property categories tracked by the index posted y-o-y declines.

Two-storey single-family home prices were little changed from last June, edging back 0.1%. By comparison, one-storey single-family home prices posted the largest y-o-y decline (-0.8%) among benchmark property categories. Meanwhile, townhouse/row prices were down by 0.7% y-o-y and apartment unit prices edged back by 0.4%.

Y-o-y trends continue to vary widely across the country, with the main theme being a growing divergence in trends between eastern and western Canada.

Results remain mixed in British Columbia, with prices down on a y-o-y basis in Greater Vancouver (-9.6%), the Fraser Valley (-6.6%) and the Okanagan Valley (-0.8%). Meanwhile, prices edged up 0.5% in Victoria and climbed 4.2% elsewhere on Vancouver Island.

Among Greater Golden Horseshoe housing markets tracked by the index, MLS® HPI benchmark home prices were up from year-ago levels in Guelph (+6.8%), the Niagara Region (+6.7%), Hamilton-Burlington (+5.4%), the GTA (+3.6%) and Oakville-Milton (+3%). By contrast, home prices in Barrie held below year-ago levels (-2.4%).

Across the Prairies, supply remains historically elevated relative to sales and home prices remain below year-ago levels. Benchmark prices were down by 3.9% in Calgary, 3.2% in Edmonton, 4% in Regina and 1.1% in Saskatoon. The home pricing environment will likely remain weak in these cities until demand and supply return to better balance.

Home prices rose 8.3% y-o-y in Ottawa (led by a 13.2% increase in townhouse/row unit prices), 6.7% in Greater Montreal (led by an 8% increase in apartment unit prices), and 1.3% in Greater Moncton (led by an 18.4% increase in apartment unit prices). (Table 1)

The MLS® HPI provides the best way to gauge price trends, as averages are strongly distorted by changes in the mix of sales activity from one month to the next.

The actual (not seasonally adjusted) national average price for homes sold in June 2019 was just under $505,500, up 1.7% from the same month in 2018.

The national average price is heavily skewed by sales in the GVA and GTA, two of Canada’s most active and expensive housing markets. Excluding these two markets from calculations cuts almost $106,000 from the national average price, trimming it to less than $400,000.

– 30 –

PLEASE NOTE: The information contained in this news release combines both major market and national sales information from MLS® Systems from the previous month. 

CREA cautions that average price information can be useful in establishing trends over time, but does not indicate actual prices in centres comprised of widely divergent neighbourhoods or account for price differential between geographic areas. Statistical information contained in this report includes all housing types. 

MLS® Systems are co-operative marketing systems used only by Canada’s real estate Boards to ensure maximum exposure of properties listed for sale. 

The Canadian Real Estate Association (CREA) is one of Canada’s largest single-industry trade associations, representing more than 130,000 REALTORS® working through some 90 real estate Boards and Associations.

Further information can be found at http://crea.ca/statistics.

For more information, please contact:

Pierre Leduc, Media Relations
The Canadian Real Estate Association
Tel.: 613-237-7111 or 613-884-1460
E-mail: pleduc@crea.ca

Canadian home sales rise again in May 2019

Ottawa, ON, June 14, 2019 – Statistics released today by the Canadian Real Estate Association (CREA) show national home sales climbed further in May 2019.

Highlights:

• National home sales rose 1.9% month-over-month (m-o-m) in May.
• Actual (not seasonally adjusted) activity was up 6.7% year-over-year (y-o-y).
• The number of newly listed homes edged back by 1.2% m-o-m.
• The MLS® Home Price Index (HPI) fell 0.2% m-o-m in May, the fifth straight decline.
• The actual (not seasonally adjusted) MLS® HPI stood 0.6% below May 2018.
• The actual (not seasonally adjusted) national average sale price was up 1.8% y-o-y.

Home sales recorded via Canadian MLS® Systems rose by 1.9% in May 2019. Together with monthly gains in March and April, activity in May reached the highest level since January 2018. While sales stood 8.9% above the six-year low reached in February 2019, this latest increase has only just returned levels to their historical average. (Chart A)

While May sales were only up in half of all local markets, that list included almost all large markets, led by gains in both the Greater Vancouver (GVA) and Greater Toronto (GTA) areas.

Actual (not seasonally adjusted) sales activity was up 6.7% compared to May 2018, marking the largest y-o-y gain recorded since the summer of 2016. The increase returned sales in line with the 10-year average for the month of May. While about two-thirds of local markets posted y-o-y gains for the month, the national increase was dominated by improving sales trends in the GTA, which accounted for close to half of the overall increase.

“Home price trends and market balance continues to differ significantly among Canadian housing markets,” said Jason Stephen, CREA’s President. “All real estate is local. No matter where you are, a professional REALTOR® is your best source for information and guidance in negotiations to purchase or sell a home during these changing times,” said Stephen.

“The mortgage stress-test continues to present challenges for home buyers in housing markets where they have plenty of homes to choose from but are forced by the test to save up a bigger down payment,” said Gregory Klump, CREA’s Chief Economist. “Hopefully the stress-test can be fine tuned to enable home buyers to qualify for mortgage financing sooner without causing prices to shoot up.”

The number of newly listed homes edged back by 1.2% in May. With sales up and new listings down, the national sales-to-new listings ratio tightened to 57.4% in May compared to 55.7% in April. That said, the measure is still within close reach of its long-term average of 53.5%.

Considering the degree and duration to which market balance readings are above or below their long-term averages is the best way of gauging whether local housing market conditions favour buyers or sellers. Market balance measures that are within one standard deviation of their long-term average are generally consistent with balanced market conditions.

Based on a comparison of the sales-to-new listings ratio with the long-term average, almost three-quarters of all local markets were in balanced market territory in May 2019.

The number of months of inventory is another important measure of the balance between sales and the supply of listings. It represents how long it would take to liquidate current inventories at the current rate of sales activity.

There were 5.1 months of inventory on a national basis at the end of May 2019, down from 5.3 in April and 5.6 months back in February. Like the sales-to-new listings ratio, the number of months of inventory is within close reach its long-term average of 5.3 months.

Housing market balance varies significantly by region. The number of months of inventory has swollen far beyond long-term averages in Prairie provinces and Newfoundland & Labrador, giving homebuyers in those parts of the country ample choice. By contrast, the measure remains well below long-term averages for Ontario and Maritime provinces, resulting in increased competition among buyers for listings and fertile ground for price gains.

MLS® HPI data are now available on a seasonally adjusted basis in addition to the actual (not seasonally adjusted) figures. On a seasonally adjusted basis, the Aggregate Composite MLS® HPI edged down 0.2% in May 2019 compared to April and stood 1.4% below the peak reached in December 2018.

Seasonally adjusted MLS® HPI readings in May were up from the previous month in 12 of the 18 markets tracked by the index; however, home price declines in the Lower Mainland of British Columbia contributed to the monthly decline in the overall index. Markets where prices rose in May from the month before include Victoria (0.5%), Edmonton (0.2%), Saskatoon (0.4%), Ottawa (0.7%), Niagara (0.2%), Oakville (0.8%), Guelph (0.5%), Barrie (3.6%), Montreal (0.5%) and Greater Moncton (0.5%), with gains of 0.1% in the GTA and Regina. By contrast, readings were down from the month before in the GVA (-1.0%), Fraser Valley (-1.1%), the Okanagan Valley (-1.3%), Calgary (-0.1%) and Hamilton (-0.7%), while holding steady on Vancouver Island outside Victoria.

The actual (not seasonally adjusted) Aggregate Composite MLS® Home Price Index (MLS® HPI) edged down by -0.6% y-o-y in May 2019. While small, it was nonetheless the largest decline in almost a decade. (Chart B)

All benchmark property categories tracked by the index posted y-o-y declines in May 2019. Townhouse/row and apartment unit prices were little changed from last May, edging back by just 0.2%. By comparison, two-storey single-family home prices were down 0.5% y-o-y and one-storey single-family home prices fell 1.7% y-o-y.

Trends continue to vary widely among the 18 housing markets tracked by the MLS® HPI. Results remain

mixed in British Columbia, with prices down on a y-o-y basis in the GVA (-8.9%), the Fraser Valley (-5.9%) and the Okanagan Valley (-0.7%). Meanwhile, prices edged up 1% in Victoria and climbed 4.7% elsewhere on Vancouver Island.

Among Greater Golden Horseshoe housing markets tracked by the index, MLS® HPI benchmark home prices were up from year-ago levels in Guelph (+5.7%), the Niagara Region (+5.4%), Hamilton-Burlington (+3.4%), Oakville-Milton (+3.4%) and the GTA (+3.1%). By contrast, home prices in Barrie and District held below year-ago levels (-6.1%).

Across the Prairies, supply remains historically elevated relative to sales and home prices remain below year-ago levels. Benchmark prices were down by 4.3% in Calgary, 3.6% in Edmonton, 3.9% in Regina and 1.3% in Saskatoon. The home pricing environment will likely remain weak in these cities until demand and supply return to better balance.

Home prices rose 8% y-o-y in Ottawa (led by a 12.2% increase in townhouse/row unit prices), 6.3% in Greater Montreal (led by a 7.6% increase in apartment unit prices), and 2% in Greater Moncton (led by a 15.9% increase in apartment unit prices). (Table 1)

The MLS® HPI provides the best way to gauge price trends, as averages are strongly distorted by changes in the mix of sales activity from one month to the next.

The actual (not seasonally adjusted) national average price for homes sold in May 2019 was close to $508,000, up 1.8% from the same month in 2018.

The national average price is heavily skewed by sales in the GVA and GTA, two of Canada’s most active and expensive housing markets. Excluding these two markets from calculations cuts almost $111,000 from the national average price, trimming it to just under $397,000.

– 30 –

PLEASE NOTE: The information contained in this news release combines both major market and national sales information from MLS® Systems from the previous month. 

CREA cautions that average price information can be useful in establishing trends over time, but does not indicate actual prices in centres comprised of widely divergent neighbourhoods or account for price differential between geographic areas. Statistical information contained in this report includes all housing types. 

MLS® Systems are co-operative marketing systems used only by Canada’s real estate Boards to ensure maximum exposure of properties listed for sale. 

The Canadian Real Estate Association (CREA) is one of Canada’s largest single-industry trade associations, representing more than 130,000 REALTORS® working through some 90 real estate Boards and Associations.

Further information can be found at http://crea.ca/statistics.

For more information, please contact:

Pierre Leduc, Media Relations
The Canadian Real Estate Association
Tel.: 613-237-7111 or 613-884-1460
E-mail: pleduc@crea.ca

Quarterly Forecasts

CREA Updates Resale Housing Market Forecast

Ottawa, ON, June 14, 2019 – The Canadian Real Estate Association (CREA) has updated its forecast for home sales activity via the Multiple Listing Service® (MLS®) Systems of Canadian real estate boards and associations in 2019 and 2020.

Many of the economic fundamentals that support housing activity remain strong outside of the Prairies as well as Newfoundland and Labrador. Following the release of CREA’s previous forecast in March, population and employment growth has remained strong and the unemployment rate has fallen further. Additionally, the Bank of Canada is widely expected to not raise interest rates over the rest of the year.

Budget 2019 also raised the maximum individual withdrawal limit under the Home Buyers’ Plan (HBP) from $25,000 to $35,000 and introduced the First Time Homebuyer Incentive, a shared equity program whereby the federal government finances a portion of a home purchase in exchange for an equity share in the home’s value. The increased HBP withdrawal limit took effect in late March, while the First Time Homebuyer Incentive is slated to launch in September.

These factors are expected to support to the beginnings of a recovery in home sales over the second half of 2019 after starting this year on a weak footing. Nonetheless, the overall level of sales is expected to remain well below where it was in recent years, as successive policy changes  – most notably the implementation of the B-20 stress test – continue to limit access to mortgage financing and dampen housing market sentiment. This is particularly the case in pricier areas where younger buyers have had little choice but to borrow more to get into the market.

National home sales are now projected to edge up 1.2% to 463,000 units in 2019. CREA’s previous forecast estimated a decline of 1.6% this year. This would still leave annual sales below the 10-year average and a far cry from the annual record set in 2016, when almost 540,000 homes traded hands. On a per capita basis, the forecast for 2019 would remain effectively tied with 2018 for the weakest year since 2001.

British Columbia is the only province expected to weigh materially on national figures in 2019, with a decline of 13.3% compared to 2018, marking a small upward revision from the previously forecast decline of 14.9%. Other revisions from the previous forecast for sales in 2019 were also upward, with Alberta moving from a 5.6% decline to a 0.9% decline, and Ontario’s gain upgraded from 0.9% previously to 3.9%.

Quebec and New Brunswick are still forecast to see the biggest sales gains in percentage terms in 2019 (+7.7% and +10.6%, respectively), with both provinces on track to set new annual records. Sales in Saskatchewan and Newfoundland and Labrador are forecast to improve by almost 5%, albeit from the lowest levels in more than a decade recorded last year. Meanwhile, activity in Manitoba and Nova Scotia is forecast to rise between 3.5% and 4.5% to near-record annual levels.

The national average price is still projected to stabilize (-0.6%) at around $485,000 in 2019 following the 4.1% drop recorded in 2018, which was the largest in almost 25 years. This reflects a stark and growing split between Eastern and Western regions. In line with the balance between supply and demand across the country, average prices are forecast to fall in 2019 in British Columbia, Alberta, Saskatchewan, and rise in Ontario, Quebec and the Maritimes. The average price is also expected to fall for the fifth consecutive year in Newfoundland and Labrador.

Sales are forecast to continue to improve in 2020. Absent the weak start experienced in 2019, national home sales are forecast to rise 4.4% to 483,200 units as interest rates remain near current levels and potential home buyers continue to adjust and adapt to the assortment of recent policy changes. Almost all provinces are forecast to see more sales in 2020 compared to 2019, with gains ranging from 1% to 6%.

That said, the big picture is that sales are expected to remain historically weak in British Columbia, Alberta, Saskatchewan and Newfoundland and Labrador, historically strong in Quebec, New Brunswick, Manitoba and Nova Scotia, and come in close to the 10-year average in Ontario.

The national average price is forecast to edge up by 0.9% to around $490,000 in 2020. Average price trends across Canada in 2020 are generally expected to be more moderate versions of those in 2019, with small declines in British Columbia, Alberta, Saskatchewan and Newfoundland and Labrador, and modest gains in all provinces from Manitoba through the Maritimes.

– 30 –

About The Canadian Real Estate Association
The Canadian Real Estate Association (CREA) is one of Canada’s largest single-industry trade associations. CREA works on behalf of more than 130,000 REALTORS® who contribute to the economic and social well-being of communities across Canada. Together they advocate for property owners, buyers and sellers.

For more information, please contact:
Pierre Leduc, Media Relations
The Canadian Real Estate Association
Tel.: 613-237-7111 or 613-884-1460
E-mail: pleduc@crea.ca­