According to statistics released by the Canadian Real Estate Association (CREA), national home sales rose 4.5 per cent from November to December, the fifth consecutive monthly sales increase.
Activity in December was up in nearly 60 per cent of all local markets, led by the Greater Toronto Area (GTA), Edmonton, Calgary, the Fraser Valley, Vancouver Island, Hamilton-Burlington and Winnipeg.
Actual (not seasonally adjusted) activity climbed 4.1 per cent year-over-year. While activity remained below December 2016 levels in the GTA, the decline there was more than offset by some significant year-over-year gains in the Lower Mainland of British Columbia, Vancouver Island, Calgary, Edmonton, Ottawa and Montreal.
“Monthly momentum for national home sales activity gained strength late last year and further expected economic and job growth with buoy sales activity this year despite slightly higher expected interest rates,” said Andrew Peck, CREA president, in a press release. “Even so, momentum for home sales differs depending on location and type.”
“National home sales in December were likely boosted by seasonal adjustment factors and a potential pull-forward of demand before new mortgage regulations came into effect this year,” added Gregory Klump, CREA’s chief economist. “It will be interesting to see if monthly sales activity continues to rise despite tighter mortgage regulations that took effect on January 1.”
The number of newly listed homes increased by 3.3 per cent month-over-month in December. As in November, the national increase was largely due to rising new supply in the GTA.
New listings and sales have both trended higher since August, resulting in the sales-to-new listings ration remaining in the mid-to-high 50 per cent range since that time, indicating balanced national housing market conditions. Based on a comparison of the sales-to-new listings ratio and its long-term average, more than two-thirds of all regional markets were balanced in December 2017.
The Aggregate Composite MLS Home Price Index climbed 9.1 per cent year-over-year in December 2017, marking the eighth consecutive deceleration in year-over-year gains and the smallest year-over-year increase since February 2016.
The slowdown in year-over-year price gains is mostly due to trends among Greater Golden Horseshoe housing markets tracked by the index, especially for single-family homes. On an aggregate basis, only single-family homes experienced slowing price increases on a year-over-year basis. By comparison, annual price gains were seen in both townhouse/row and apartment units.
In December, the average price of an apartment unit climbed 20.5 per cent, followed by townhouse/row units (up 13 per cent), one-storey single family homes (up 5.5 per cent) and two-storey single family homes (up 4.5 per cent).
Benchmark home prices were above year-ago levels in 9 of the 13 markets tracked by the MLS Home Price Index, with Calgary, Oakville Milton, Regina and Saskatoon all experiencing falling prices.
The national average sale price of a home sold in December 2017 was just over $496,500, up 5.7 per cent compared to December 2016. The national average price is heavily skewed by sales in Greater Vancouver and Greater Toronto Area, two of the country’s most expensive markets. When removing these two markets from calculations, the national average price falls by nearly $116,000 to become $381,000.