The number of homes sold in Canada fell 6.7 per cent from May to June, marking the largest monthly decline in home sales since June 2010, says the Canadian Real Estate Association (CREA). With slower sales also logged in April and May, activity in June came in 14.1 per cent below the sales record set in March of this year.
June sales had fallen on a month-over-month basis in 70 per cent of all local markets, led by the Greater Toronto Area (GTA). Monthly declines were also experienced in all surrounding Greater Golden Horseshoe housing markets, the Lower Mainland of British Columbia, Kingston, Montreal and Quebec City.
Actual (not seasonally adjusted) activity was down 11.4 per cent year-over-year, which is mostly due to the significant fall in GTA sales activity. Still, half of all housing markets experienced year-over-year sales declines. Meanwhile, Calgary, Edmonton, London and St. Thomas, Ottawa, Montreal and Halifax-Dartmouth all experienced sales increases compared to June 2016 levels.
“Canadian economic and job growth have been improving, which is good news for housing demand,” said Andrew Peck, CREA president, in a press release. “However, it also means that interest rates have begun to rise, which may impact homebuyer confidence – particularly in pricier markets like Toronto and Vancouver where recent housing policies had already moved potential buyers to the sidelines. In lower priced markets, the effect of higher interest rates on housing affordability will be relatively muted.”
The number of newly listed homes fell 1.5 per cent in June, led by large declines in the GTA compared to record levels in April and May. Other markets in the Greater Golden Horseshoe also saw a decline in new supply.
The national sales-to-new listings ratio indicated a more balanced market than what has been seen in months, moving to 52.8 per cent. Just three months ago, the sales-to-new listings ratio was in the high-60 per cent range, indicating a seller’s market.
Less than half of all local housing markets favoured sellers in June. The majority of markets with ratios higher than 60 per cent are located in British Columbia and Ontario, but some markets in the Greater Golden Horseshoe have moved into more balanced territory. The ratio fell below 40 per cent in the GTA and Barrie, indicating a buyer’s market in these regions.
Nationally, there were 5.1 months of inventory at the end of June 2017, which is an increase of a full month compared to where the measure stood in March and the highest level since January 2015.
The Aggregate Composite MLS HPI climbed 15.8 per cent on an annual basis in June 2017, representing a further slowdown in year-over-year gains since April. Price gains fell in all benchmark home categories, but were still significant.
In apartment units, the year-over-year price gains were the largest at 20.4 per cent, followed by townhouse/row units, which experienced price increases of 17.4 per cent. Two-storey single family homes saw prices increase by 15.4 per cent annually, while one-storey single family homes saw prices increase by 12.3 per cent year-over-year.
The actual (not seasonally adjusted) national average price for homes sold last month was $504,458, an increase of 0.4 per cent year-over-year. The national average price continues to be inflated due to sales activity in Greater Vancouver and Greater Toronto, two of the country’s most active and expensive housing markets. When excluding these two markets from calculations, the national average price falls to $394,660.