National Home Sales Climb Higher for Seventh Consecutive Month

The Canadian Real Estate Association (CREA) released its national monthly home sales figures, announcing a 1.8 percent increase in activity through Canada’s MLS Systems between July and August 2014.

This marks the seventh consecutive monthly increase in national sales activity, and is also the highest level of sales in one month the country has seen since January 2010. The actual (not seasonally adjusted) activity in August showed a 2.1 percent increased compared to the same month last year.

“Sales picked up in some of Canada’s most active and expensive real estate markets which fuelled another national increase,” said CREA President Beth Crosbie. “Even so, the national increase in sales does not reflect local trends in many markets across Canada. As always, all real estate is local and whether you’re looking to buy or sell, your local REALTOR® is your best source of information about the housing market where you currently live or might like to in the future.”

Though sales activity was up compared to the previous month, more than half of Canada’s local housing markets experienced decreases. The only reason the country as a whole saw nearly a 2 percent increase is because Greater Vancouver, Calgary, and Greater Toronto had so many sales.

Year-to-date sales saw a 4.3 percent increase compared to the same time period in 2013, which is on par with the 10 year average. Though sales were up, listings were down 1.2 percent compared to July, with Greater Toronto leading the way with 60 percent less new supply. CREA says that Canada has approximately 5.8 months of inventory remaining, which is a healthy amount. This means that based on average selling trends, it would take nearly 6 months to run out of homes to purchase.

Via CREA

“Sales activity in recent months has remained stronger than was anticipated earlier this year,” said Gregory Klump, CREA’s Chief Economist. “Listings and sales this spring were deferred due to unseasonably harsh weather, which subsequently supported activity once the delayed spring home buying season got into gear. This trend was reinforced by a decline in mortgage interest rates.”

Unsurprisingly, two-storey singles were the most popular home type in August, with sales jumping 6.32 percent compared to August 2013. Townhomes came in second with a 5.59 percent gain, one-storey singles in third with a 5.23 percent increase, and condo apartment units followed in a distant fourth with a 3.38 percent year-over-year increase.

According to the MLS Home Price Index, the actual national average for homes sold in August 2014 was $398,618, which is a 5.3 percent increase compared to the same period last year. Greater Vancouver and Greater Toronto somewhat skew the average selling price because of their dramatic increases. Without these two regions included, the average selling price in August was only $324,738, which is a year-over-year increase of just 3.9 percent.

“The boost from deferred sales is still expected to prove transitory,” Klump added. “While national activity has yet to cool, sales were down from the previous month in the majority of Canada’s local markets, which may be early evidence that the transitory boost is fading. That said, low interest rates will continue to support housing affordability and sales activity.”

Clearly, Greater Toronto and Greater Vancouver are strongly influencing Canada’s housing market trends. With some of the country's most active homebuilders and developers, Newinhomes.com is very excited to keep a close eye on Toronto’s new home market heading into one of the traditionally busiest times of the year for the industry.