Canadian home sales fell 1.6 per cent between September and October 2018, reports the Canadian Real Estate Association (CREA). While activity is stronger now compared to the first half of 2018, it remains below monthly levels recorded from early 2014 to 2017.
The number of transactions fell in more than half of all local housing markets, led by Hamilton-Burlington, Montreal and Edmonton. Although home sales activity did improve slightly in many markets, that increase was offset by a decline in sales in other regions by a factor of two.
Actual (not seasonally adjusted) activity fell 3.7 per cent annually, in line with the 10-year average for the month. Although sales were down on a year-over-year basis in slightly more than half of all local markets last month, lower sales in Greater Vancouver and the Fraser Valley more than offset the increase in sales in the Greater Toronto Area (GTA) and Montreal by a large amount.
“This year’s new mortgage stress-test has lowered how much mortgage home buyers can qualify for across Canada, but its effect on sales has varied somewhat depending on location, housing type and price range,” said Barb Sukkau, CREA president, in a press release.
“National sales activity lost momentum in October. In part, this reflects waning activity among some urban centers in Ontario’s Greater Golden Horseshoe region and the absence of an offsetting rise in sales in the Lower Mainland of British Columbia,” added Gregory Klump, CREA’s chief economist. “Even so, the balance between sales and listings in these regions points to stable prices or modest gains. By contrast, the balance between sales and listings for housing markets in Alberta, Saskatchewan and Newfoundland indicates a weak pricing environment for homeowners who are looking to sell.”
The number of newly listed homes dropped 1.1 per cent month-over-month in October, led by the GTA, Calgary and Victoria. The dip in new supply in these markets more than offset an increase in new supply in Edmonton and Greater Vancouver.
The national sales-to-new listings ratio fell to 54.2 per cent in October, close to September’s reading of 54.4 per cent and its long-term average of 53.4 per cent. Based on a comparison between the sales-to-new listings ratio with the long-term average, about two-thirds of all local markets were in the balanced range in October 2018.
At the end of last month, there were 5.3 months of inventory on a national basis, a figure that remains in line with its long-term average. However, the number of months of inventory is well above its long-term average in the Prairie provinces and in Newfoundland & Labrador. However, in Ontario and Prince Edward Island, the measure remains more than one standard deviation below its long-term average. Elsewhere, the number of months of inventory is closer to its long-term average, suggesting that sales and inventory are well-balanced.
The Aggregate Composite MLS Home Price Index (HPI) climbed 2.3 per cent year-over-year in October. Apartment units saw prices climb 7.4 per cent year-over-year, the largest gains seen last month, followed by townhouse/row units (up 3.9 per cent). In comparison, one-storey single-family homes experienced a 0.6 per cent increase in prices, while two-storey single-family home prices remained level.
Trends continue to vary widely across the country. In British Columbia, home price gains have been slowing on an annual basis in Greater Vancouver (+1.0 per cent), Fraser Valley (+6.8 per cent), Victoria (+8.5 per cent) and Vancouver Island (+11.8 per cent).
Meanwhile, home prices are improving on a year-over-year basis in the Greater Golden Horseshoe region, with home prices up annually in Guelph (+9.3 per cent), Hamilton-Burlington (+6.8 per cent), the Niagara Region (+6.3 per cent), the GTA (+2.6 per cent) and Oakville-Milton (+2.2 per cent). Although home prices in Barrie and District declined by 0.9 per cent, keeping them slightly below year-ago levels, declines in that region are slowing. The CREA projects that if current price momentum continues, home prices next month should turn positive, compared to December 2017.
In the Prairie provinces, benchmark home prices fell on a year-over-year basis in Calgary (-2.6 per cent), Edmonton (-2.4 per cent), Regina (-3.6 per cent) and Saskatoon (-0.9 per cent).
Meanwhile, average home prices rose in Ottawa by 6.6 per cent year-over-year, while Montreal saw gains of 6.3 per cent. Greater Moncton also saw the average price of a home increase by 4.2 per cent.
The actual (not seasonally adjusted) national average price for a home sold in October 2018 fell 1.5 per cent compared to October 2017, to just below $496,800. When removing the Greater Vancouver and Greater Toronto Areas from calculations, the national average price falls to just below $383,000.