According to recent statistics from the Canadian Real Estate Association (CREA), national home sales increased by 4.1 per cent from May to June 2018. Although this marks the first considerable month-over-month increase this year, sales remain well below monthly levels recorded over the past five years.
Over 60 per cent of all local housing markets reported increased sales activity in June compared to May, led by the Greater Toronto Area (GTA). Meanwhile, sales in British Columbia continue to moderate.
Actual (not seasonally adjusted) sales activity fell 10.7 per cent year-over-year in June. Sales hit a five-year low and remained almost seven per cent below the 10-year average for the month of June. Activity came in below year-ago levels in nearly two-thirds of all local markets, led by those in the Lower Mainland of British Columbia.
“This year’s new stress-test on mortgage applicants has been weighing on home sales activity; however, the increase in June suggests its impact may be starting to lift,” said Barb Sukkau, CREA president, in a press release. “The extent to which the stress-test continues to sideline home buyers varies by housing market and price range.”
“The national increase in June home sales suggests activity may indeed be starting to turn the corner,” added Gregory Klump, CREA’s chief economist. “Even so, the number of homes trading hands has a long way to go before it returns to levels posted in recent years. Looking ahead, home sales activity and price gains will likely be held in check by higher interest rates.”
The number of newly listed homes declined by 1.8 per cent in June, and also remained below levels for the month for the last few years. New listings fell in several large urban markets, including those in B.C.’s Lower Mainland, Calgary, Edmonton, Ottawa and Montreal.
With sales up and new listings down, the national sales-to-new listings ratio reached 54.3 per cent in June, compared to 51.2 per cent in May, indicating a balanced market nationally. About two-thirds of all local markets were also in balanced market territory in June 2018.
The Aggregate Composite MLS HPI climbed 0.9 per cent year-over-year in June 2018, marking the 14th consecutive month of decelerating gains. This figure was also the smallest increase since September 2009.
Decelerating year-over-year home price gains are largely reflecting trends currently being seen in the Greater Golden Horseshoe (GGH) housing markets tracked by the index. Home prices in that region have started to stabilize and trend higher on a month-over-month basis in recent months.
The largest year-over-year price gains in June were seen in apartment units (an increase of 11.3 per cent), followed by townhouse/row units (up 4.9 per cent), but price gains in these home types have decelerated this year. Meanwhile, one-storey and two-storey single-family home prices fell compared to year-ago levels in June (down 1.8 per cent and 4.1 per cent, respectively).
With home prices having climbed above year-ago levels in 8 of the 15 housing markets tracked by the HPI, price trends continue to vary widely. Fraser Valley experienced the largest home price increase, at 18.4 per cent, while home prices in Barrie and District fell by 6.5 per cent year-over-year.
The actual (not seasonally adjusted) national average price for homes sold in June 2018 fell 1.3 per cent year-over-year to just under $496,000. Although this marked the fifth month in a row of national annual price declines, it was the smallest decline among them.
When removing the Greater Vancouver Area and GTA, Canada’s most active and expensive housing markets, from consideration, the national average price for a home fell to just over $389,000.