According to statistics released today by The Canadian Real Estate Association (CREA), national home sales improved in May 2013, building on gains recorded in the previous two months.
The number of home sales processed through the MLS® Systems of real estate Boards and Associations and other cooperative listing systems in Canada rose 3.6 per cent on a month-over-month basis in May 2013, its largest monthly gain in almost two and a half years.
The increase lifted national activity almost to where it had been just before new mortgage rules came into force last summer, marking the first noteworthy increase in the past nine months.
Home sales improved in two-thirds of all local markets in May. This list encompasses almost all large urban markets including Greater Vancouver, Calgary, Edmonton, Winnipeg, Greater Toronto, Hamilton-Burlington, Kitchener-Waterloo, Ottawa, Montreal and Halifax-Dartmouth.
"While sales improved in sync among the vast majority of local markets in May, the fact remains that all real estate is local," said CREA President Laura Leyser. "Your REALTOR® is your best resource for understanding how the housing market is shaping up where you live or might like to."
"Until recently, mixed sales trends across the country taken together had resulted consistently in a stable national trend," said Gregory Klump, CREA's Chief Economist. "The difference in May was that sales improved in so many markets at the same time."
"The pop in Canada's resale housing numbers adds one more to a series of upbeat economic indicators that exceeded expectations in recent weeks. It's important not to put too much stock in one month's worth of data, but taken together with other recently published economic gauges, Canadian resale housing market results provide further evidence of the widely anticipated firming trend for Canadian economy."
Actual (not seasonally adjusted) activity came in 2.6 per cent below levels reported in May 2012, with transactions down on a year-over-year basis in about 60 per cent of local markets.
The number of newly listed homes rose 1.9 per cent month-over-month in May. New listings were up in about two-thirds of all local markets, led by a rebound in non-CMA regions in Quebec, as well as by gains in the Fraser Valley, Edmonton, Winnipeg, and Greater Toronto.
With a larger increase in sales than new listings, the national sales-to-new listings ratio rose to 51.4 per cent in May compared to 50.6 per cent in April. This measure has remained firmly rooted in balanced market territory since early 2010 and has held within short reach of 50 per cent since August 2011. Based on a sales-to-new listings ratio of between 40 to 60 per cent, two-thirds of all local markets were in balanced market territory in May.
The number of months of inventory is another important measure of balance between housing supply and demand. It represents the number of months it would take to completely liquidate current inventories at the current rate of sales activity.
Nationally, there were 6.4 months of inventory at the end of May 2013. This indicates that the national housing market firmed slightly compared to a reading of 6.6 months at the end of April. Provinces where the number of months of inventory declined include British Columbia, Alberta, Ontario, Quebec, New Brunswick, and Nova Scotia.
The actual (not seasonally adjusted) national average price for homes sold in May 2013 was $388,910, an increase of 3.7 per cent from the same month last year.
For almost two years now, declining sales activity in Greater Vancouver has exerted a downward pull on the national average sale price. May 2013 marks a departure from that trend, with activity in Greater Vancouver having boosted the national average price for the first time since August 2011.
The MLS® Home Price Index (MLS® HPI) is not affected by changes in the mix of sales the way that average price is. For that reason, it provides the best gauge of Canadian home price trends.
This month, Ottawa joins the HPI. With this addition, the index now includes data from 8 real estate boards (Greater Vancouver, Fraser Valley, Calgary, Regina, Saskatoon, Greater Toronto, Greater Montreal and now Ottawa), representing approximately 50% of all Canadian resale housing activity.
The Aggregate Composite MLS® HPI rose 2.3 per cent on a year-over-year basis in May, up marginally compared to the 2.2 per cent increase reported in April. While this interrupted the string of diminishing year-over-year gains posted over the past eleven months, it was still the slowest rate of price growth in more than two years with the exception of slightly lower readings in March and April 2013.
Year-over-year price growth advanced for all Benchmark property types tracked by the index. Price gains remained strongest for single family homes (+2.8 per cent), followed by townhouse/row units (+1.9 per cent), and apartment units (+1.1 per cent).
Year-over-year price growth in the MLS® HPI was mixed across the markets tracked by the index.