After months of static activity on the national home sales front, sales edged higher by 1.3 per cent in January, the Canadian Real Estate Association (CREA) reports. While this small rise in sales from December to January suggests little change, it’s heartening as markets continuing to hover in the wake of tightened mortgage lending rules put in place in August.
“There is little news to report about national sales activity, which continues to hold fairly steady at the lower levels first reached when mortgage rules were tightened in mid-2012,” says CREA President Wayne Moen. “That said, things are becoming more interesting among local markets, with improving sales in Vancouver and Toronto likely to come as something of a surprise to some.”
Bungee Conditions in Our Biggest Markets
Both of the country’s largest markets saw monthly sales increase in January, with 5.6 per cent in the Greater Toronto Area and 4.7 in Greater Vancouver, according to CREA. Don’t get too excited though – the February numbers from the Toronto Real Estate Board are in, and they show this marginal growth is countered with an 8.3 per cent decline for the GTA on a year-over-year basis. These doom and gloom numbers also go hand in hand with increased prices – up four per cent from last year due to shrinking supply.
“The number of transactions was lower for most home types in comparison to last year, but so too was the number of new listings. This means that market conditions remained quite tight, especially for low-rise home types. The result was continued price growth over last year,” said Toronto Real Estate Board President Ann Hannah in a release.
According to TREB, Toronto-based buyers can expect to pay an average of $555,423 this year, compared to $540,246 in 2012. Rising prices are also experienced in the 905 neighbourhoods, with the average price at $480,030, up from $458,071.
Loss and Gains Nationwide
Despite these seemingly stagnant conditions, a look at individual markets offers some solace with home sales picking up a bit of steam in almost half of all regions.
According to CREA’s numbers, Edmonton saw the greatest January boom with sales climbing by nearly 10 per cent. On a national scale, this upward movement was partially offset by weaker sales in Ottawa, the Fraser Valley, Montreal, Regina, London and St. Thomas, and Calgary.
Naturally, the biggest buzz in the news right now is year-over-year market performance.
With the exception of Calgary, Edmonton, Winnipeg, Winsor-Essex and Guelph, nearly two-thirds of local markets saw year-over-year declines in sales activity last month.
As well, actual (not seasonably adjusted) national activity was 5.2 per cent below last year’s January level.
“If national sales activity remains stable near the levels we’ve been seeing since last August, then year-over-year comparisons will begin fading after the crucial spring buying season,” says Gregory Klump, CREA’s Chief Economist. “Until then, the focus may remain on how sales were stronger in the first half of last year compared to lower but stable national activity since then.”
New Listings Mix It Up
Despite the stability, newly listed homes are still hitting the market with January seeing a 1.6 per cent rise – the first monthly increase since last September.
Greater Toronto was the most active market with Greater Vancouver, Montreal, the Fraser Valley, and Vancouver Island also seeing a rise in newly listed homes.
But what were houses going for in January? According to the CREA, the actual (not seasonally adjusted) national average price for homes sold in January was $354,754 – a two per cent increase in last January’s housing price.
Six in 10 Canadians Fear a Housing Bubble
Inline with the lack of inertia-shifting news, the economic mindset of Canadians is still jittery according to Highlights from the Canadian Association of Accredited Mortgage Professional’s Fall 2012 Consumer and Industry Surveys.
Although 70 per cent of Canadians say they are well positioned to weather another housing downturn and 83 per cent remain confident that real estate is a good long-term investment, many consumers expect housing prices to increase.
CREA’s Moen cautions Canadian’s to not lose site of the fact that housing is still dependent on where you’re looking.
“As always, all real estate is local, so buyers and sellers should speak to their realtor to understand how the housing market is shaping up where they live or are considering to live,” he adds.