The national housing market numbers are in from the Canadian Real Estate Association for the month of March, and it appears the trend of slowing sales and rising prices reported in Greater Vancouver and the Greater Toronto Area is nation-wide.
March home sales are down 15.3 per cent from last year’s levels, though a slight increase of 2.4 per cent was seen from February to March – a sign that conditions are heating a bit as the spring mortgage market season advances. The top markets seeing gains are Greater Vancouver, Greater Toronto Area, Fraser Valley, Calgary, Montreal, Saskatoon, Hamilton-Burlington and Kitchener-Waterloo. The city of Edmonton, however, was the only Canadian market to surpass sales growth expectations.
It shows the Canadian housing market is continuing to balance out in the aftermath of last summer’s CMHC mortgage rule changes – but modest gains are still being driven by demand. According to CREA President Laura Leyser, the association is keen to see whether last month’s increase will bloom into an upward trend. “National sales have been holding fairly stable since last summer,” she says. “We’ll be watching closely as the spring market picks up to see whether the March sales increase marks the beginning of an improving trend.”
Long Weekend Cause for Lagging Sales
CREA indicates that growth in March could have been even higher, had it not been for the Easter long weekend. Says CREA Chief Economist Gregory Klump, “Activity in the months ahead will reveal whether the monthly improvement in seasonally adjusted March sales reflects technical seasonal adjustment factors or a fundamental improvement in demand.”
Home Prices Trend Slightly Higher
Nationally, sales prices were up 2.5 per cent year-over-year nationally to $378,532, though it’s the smallest gain in two years as the MLS Home Price Index, which measures home price trends and price inflation in Canada’s residential markets, pegged March’s growth at 2.2 per cent. Alberta is leading the pack in terms of price gain, with Calgary and Edmonton pulling up the national average.
Sales Inventory Slightly Down
The number of new homes listed on the market was also up in the month of March in two thirds of all local markets, with the largest additions in GTA, Montreal, Calgary, London and St. Thomas. The sales-to-new-listings ratio clocked in at 49.9 per cent – down slightly from 50.3 per cent in February, and consistent with levels over the last eight months.
Sales inventory, which measures the amount of time required to sell all listed properties on the market, dropped to 6.5 months from 6.7 – a sign of increased sales and fewer new starts on the market.
While housing numbers are making little headway, CREA’s Klump says they aren’t out of the ordinary, considering the changes made to mortgage rules. “Analysis will likely continue to focus on how sales remain down from last year, but this shouldn’t come as a surprise given that mortgage regulations and lending guidelines at that time were yet to be tightened,” he says. “Since those factors came into force, national home sales have held fairly steady, notwithstanding the rise in seasonally adjusted March sales.”
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