Canadian home sales fell 6.5 per cent month-over-month in February, marking the second consecutive monthly decline following record sales in December 2017 and the lowest reading in nearly five years, according to statistics released by the Canadian Real Estate Association (CREA).
February sales were down on a monthly basis in nearly three-quarters of all local housing markets, with large monthly declines recorded in and around the Greater Vancouver and Greater Toronto areas.
Actual (not seasonally adjusted) activity declined 16.9 per cent year-over-year to reach a five-year low for the month of February. Sales were also seven per cent below the 10-year average for the month. February sales activity was down compared to year-ago levels in 80 per cent of all local markets, including those within and surrounding Ontario’s Greater Golden Horseshoe region.
“The drop off in sales activity following the record-breaking peak late last year confirms that many homebuyers moved purchase decisions forward late last year before tighter mortgage rules took effect in January, said Gregory Klump, CREA’s chief economist, in a press release. “Momentum for home sales activity going into the second quarter is also likely to be weighed down by housing market uncertainty in British Columbia, where new housing policies were introduced toward the end of February.”
The number of newly listed homes climbed 8.1 per cent month-over-month in February, following a drop of more than 20 per cent in January. Despite this increase, new listings remained 6.4 per cent below the 10-year monthly average and 14.6 per cent below the peak reached in December 2017.
New supply was up in approximately three quarters of all local markets. The monthly increase was led by B.C.’s Lower Mainland, the GTA, Ottawa and Montreal, which all remained balanced or continue to favour sellers. The national sales-to-new listings ratio eased to 55 per cent, compared to 63.7 per cent in January, indicating a balanced housing market.
The number of months of inventory also helps measure the balance between housing supply and demand. At the end of February 2018, there were 5.3 months of inventory on a national basis – the highest level in over two years and in line with the long-term average of 5.2 months.
The MLS Home Price Index (HPI) rose by 6.9 per cent year-over-year in February 2018, which marks the 10th consecutive month when year-over-year gains decelerated. It was also the smallest year-over-year increase since October 2015.
Slowing year-over-year price growth is largely reflective of trends found in the GGH housing markets. Prices in the area have stabilized or begun to show tentative signs of moving higher recently; however, year-over-year comparisons are likely to continue to deteriorate further due to rapid price gains experienced last year.
The price for an apartment unit climbed 20.1 per cent year-over-year in February, the largest price gains across all home types. The price for a townhouse/row unit increased by 11.8 per cent, while one-storey single family homes saw price increases of 3.5 per cent, and two-storey single family homes only saw increases of one per cent.
The actual (not seasonally adjusted) national average price for homes sold in February 2018 just surpassed $494,000, a five per cent decline compared to February 2017. This drop demonstrates the impact of GTA sales activity on the national average price. When removing the Greater Vancouver and Greater Toronto regions, two of the most active and expensive markets, from calculations, the national average price falls to just under $382,000.