Canadian home sales dipped in December

Tuesday, January 26, 2016

Canadian home sales experienced a slight decrease of 0.6 per cent from November to December, according to statistics recently released by the Canadian Real Estate Association (CREA). Despite this, the numbers stayed above year-ago levels and activity remains close to a six-year high.

December sales fell month-over-month in over half of all local markets. Sales declines in Calgary, Edmonton, GTA’s York Region and Hamilton-Burlington offset gains recorded in other regions.

“An increasingly short supply of listings in Vancouver and Toronto blunted the impact of changes to mortgage regulations announced in December that were aimed at cooling these housing markets,” said Pauline Aunger, CREA president, in a press release. “Buyers there had been expected to bring forward their purchase decisions before new regulations take effect in February 2016, but they faced a growing shortage of supply. Meanwhile, supply is ample in many other major urban markets, particularly those where buyers have become cautious amid economic uncertainty.”

“December mirrored the main themes of 2015, with strong sales activity and price growth across much of British Columbia and Ontario offsetting declines in activity among oil producing regions,” said CREA chief economist Gregory Klump in a press release. “The recent decline and uncertain outlook for oil prices means that housing market prospects are unlikely to improve in the near term in regions where job market prospects are tied to oil production.”

Actual (not seasonally adjusted) activity jumped 10 per cent year-over-year in December. Sales activity in Q4 2015 increased two per cent over Q3, reaching the highest quarterly level in six years. Annual home sales jumped 5.5 per cent year-over-year, reaching the second-highest annual level on record, three per cent lower than the annual record set in 2007.

The number of newly-listed homes increased by 2.2 per cent month-over-month in December. This figure, on top of the 3.3 per cent gains seen in November, has elevated new supply to its highest monthly level in nearly six years.

The national sales-to-new listings ratio sat at 55.5 per cent in December, the lowest it has been since March 2015. Despite this, the ratio indicates a balanced market overall.

The MLS Home Price Index (HPI) increased 7.3 per cent year-over-year in December, the largest gain seen in over five years. Growth was especially prevalent in single family homes and townhouses. Two-storey single family homes saw price gains of 9.15 per cent year-over-year, while one-storey single family homes experienced gains of 6.63 per cent. Sales of townhouse/row units increased by 6.12 per cent, while apartments posted gains of 4.96 per cent.

The actual (not seasonally adjusted) national average price of homes sold in December sat at $454,342, a 12 per cent increase year-over-year. When excluding the Greater Toronto and Greater Vancouver markets, which are some of the most expensive in Canada, the average price of homes sold in December sat at $336,994, a year-over-year increase of 5.4 per cent.

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