National home sales fell 2.1 per cent from June to July, marking the fourth consecutive month of declining sales activity, according to statistics released by the Canadian Real Estate Association (CREA). Although the decline was about one-third of those felt in May and June, it leaves sales activity 15.3 per cent below March’s record-setting levels. Sales were down from the previous month in nearly two-thirds of all local markets, led by the Greater Toronto Area (GTA), Calgary, Halifax-Dartmouth and Ottawa.
Actual (not seasonally adjusted) sales activity fell 11.9 per cent year-over-year in July 2017. Sales were down from year-ago levels in about 60 per cent of all local markets, led by markets in the GTA and surrounding areas. National sales net of activity in the Greater Golden Horseshoe remained little changed from one year ago.
“July’s interest rate hike may have motivated some homebuyers with pre-approved mortgages to make an offer,” said Andrew Peck, CREA president, in a press release. “Even so, sales activity continued to soften in the Greater Golden Horseshoe region. Meanwhile, sales and prices in Montreal continue to strengthen.”
“July marked the smallest monthly decline in Greater Golden Horseshoe home sales since Ontario’s Fair Housing Plan was announced in April,” said Gregory Klump, CREA’s chief economist. “This suggests sales may be starting to bottom out amid stabilizing housing market sentiment. Time will tell whether that’s indeed the case once the transitory boost by buyers with pre-approved mortgages fades.”
The number of newly listed homes in the GTA dipped by 1.8 per cent. Many markets in the Greater Golden Horseshoe region also saw new supply decline recently after the increases felt immediately following the Ontario government’s announcement of its Fair Housing Plan in April. New listings also dropped in Calgary, Edmonton, Montreal and northern British Columbia.
With sales down by about the same amount as new listings in July, the national sales-to-new listings ratio changed very little, sitting at 53.5 per cent, indicating a balanced market. In the first quarter of 2017, the ratio was in the high 60 per cent range. Balanced market conditions are present in over 60 per cent of all local markets. There were 5.2 months of inventory on a national basis at the end of July 2017, the highest level since January 2016, further indicating a balanced market.
The Aggregate Composite MLS Home Price Index (HPI) climbed 12.9 per cent year-over-year in July 2017, representing a further deceleration in year-over-year gains since April. The slowing growth from June to July was a result of softening prices in the Greater Golden Horseshoe markets tracked by the index.
Price gains slowed in all benchmark categories, led by single family homes. Apartment units posted the largest year-over-year gains in July (20 per cent), following by townhomes/row units (15.9 per cent), two storey single family homes (10.7 per cent) and one-storey single family homes (9.7 per cent). Benchmark home prices were up compared to year-ago levels in 12 out of 13 housing markets tracked by the MLS HPI, although price trends continued to vary significantly by region.
The actual (not seasonally adjusted) national average price for homes in July 2017 was $478,696, a 0.3 per cent decline compared to year-ago levels, marking the first annual decline in national average price since February 2013, reflecting fewer sales in the GTA and Greater Vancouver on a year-over-year basis. When excluding these two regions from calculations, the national average price sat at $381,297.