National home sales climbed 5.2 per cent month-over-month in February 2017, reaching its highest level since April 2016, according to statistics released by the Canadian Real Estate Association (CREA). Although monthly sales increases were seen in about 70 per cent of all local markets, the bump in sales was mostly driven by an increase in activity across the Greater Toronto Area (GTA) and surrounding regions.
Actual (not seasonally adjusted) activity dropped 2.6 per cent year-over-year in February. This decline reflects slowing sales in the Lower Mainland of British Columbia compared to the elevated levels seen one year ago.
“In and around Toronto, many potential move-up buyers find themselves outbid in multiple-offer situations amid a short supply of listings,” said Gregory Klump, CREA chief economist, in a press release. “As a result, they aren’t putting their current home on the market. It’s something of a vicious circle from the standpoint of a supply shortage and a challenge for first-time and move-up home buyers alike. By contrast, housing markets in urban markets elsewhere in Canada are either balanced or are amply supplied. Because housing market conditions vary by region, further tightening of mortgage regulations aimed at cooling the housing market in one region may destabilize it elsewhere.”
The number of newly listed homes increased 4.8 per cent month-over-month in February 2017, led by activity in the GTA and nearby markets, following a steep decline in January. More than one-third of all local housing markets saw new listings decline from January levels, including those in the Prairies, northern Ontario and the Atlantic region. Meanwhile, new listings in the Greater Vancouver area fell nearly 25 per cent month-over-month, reaching its lowest level since 2001.
The national sales-to-new listings ratio was 69 per cent, up slightly from January’s 68.7 per cent, indicating a sellers’ market. The ratio was above 60 per cent in more than half of all local housing markets in February, the majority if which are in British Columbia, in and around the GTA and across southwestern Ontario.
The Aggregate Composite MLS HPI climbed 16 per cent year-over-year in February 2017. This was up from January’s increase, reflecting an acceleration in home price increases, especially for single family homes in and around Toronto.
Prices for two-storey single family homes rose 17.9 per cent year-over-year, while townhouse units saw increases of 16 per cent. One-storey single family homes experienced price increases of 15 per cent year-over-year, while apartment units had the smallest gains at 13.7 per cent.
Benchmark home prices were up from year-ago levels in 11 of 13 housing markets tracked by the MLS HPI, but Calgary and Saskatoon saw year-over-year declines, at 1.9 per cent and 1.2 per cent, respectively. Prices in these two markets are now 5.6 per cent and 5.1 per cent below their respective peaks reached in 2015.
The actual (not seasonally adjusted) national average price for homes sold in February 2017 was $519,521, an increase of 3.5 per cent year-over-year. This figure continues to be inflated due to sales activity in Greater Vancouver and Greater Toronto. When those two regions are removed from calculations, the national average price drops nearly $150,000 to $369,728.