Photo: James Bombales
Fewer Canadian homes sold last month compared to December 2016, as the sales volume dropped by 1.3 per cent. According to a report published today by the Canadian Real Estate Board (CREA), January saw the second lowest monthly level of home sales since the fall of 2015 and was barely above levels recorded last November, after stricter mortgage regulations came into effect.
Although national year-over-year actual sales activity was up 1.9 per cent, sales activity was down in about half of all local markets including the Greater Toronto Area, Greater Vancouver and Montreal, compared to December 2016.
For a second consecutive month, the number of newly listed homes dropped 6.7 per cent. About two-thirds of all local markets saw a decline, led by the GTA, Victoria and other Vancouver Island markets.
CREA’s Chief Economist Gregory Klump says the shortage of available homes for sale has become more severe in some cities. “Unless sales activity drops dramatically, the outlook for home prices remains strong in places that face a continuous supply shortage,” he said.
In January, the national sales-to-new listings ratio increased to 67.7 per cent compared to 64.0 per cent in December. The number of months of inventory on a national basis has hit a six-year low. At the end of January, there were 4.6 months of inventory, unchanged from December 2016.
In January, the MLS Home Price Index rose by 15 per cent. With a small increase from December’s gain, this reflects a boost in apartment and townhouse/row unit prices, which have increased 15.8 per cent year-over-year. Two-storey single-family homes saw the strongest year-over-year gains with 16.8 per cent.
Even though national benchmark home prices were up from year-ago levels in 10 of 13 housing markets, year-over-year price trends continued to fluctuate widely by location. In Greater Vancouver, the GTA, Oakville-Milton and Guelph, benchmark prices continue to soar in these markets with year-over-year gains ranging from 18 per cent to 26 per cent. Greater Montreal’s home prices were up 3.1 per cent in January compared to year-ago levels. While dealing with its struggling economy, Calgary saw a 2.9 per cent year-over-year decline in home prices.
TD Economics says as mortgage rates begin to climb, Canadian home sales will fall by a modest 3 per cent in 2017 and 4 per cent in 2018. As supply constraints are increasing home price growth may decelerate but not as much as expected, especially in Ontario and BC markets.
The national average price continues to be “pulled upward” by sales activity in Canada’s hottest real estate markets — Greater Vancouver and the GTA. However, the actual national average price for homes sold in January has remained almost unchanged from a year ago, at $470,253.