According to statistics released today by The Canadian Real Estate Association (CREA), national resale housing activity edged lower on a month-over-month basis in June 2012. Price gains remained strong in Toronto, continued slowing in Greater Vancouver, and accelerated in Calgary.
Sales over Multiple Listing Service® (MLS®) Systems in Canada eased 1.3 per cent on a month-over-month basis in June 2012. This follows a 3.4 per cent decline posted in May. National activity was down from the previous month in slightly more than half of all local markets, with Greater Toronto and Vancouver contributing most to the small decline.
“Canada’s housing market lost a little altitude in June, but it’s still flying pretty high,” said Wayne Moen, CREA President. “That said, sales activity and average prices bucked the national easing trend in a number of markets, which underscores that all real estate is local. Buyers and sellers should talk to their REALTOR® to understand how the housing market is shaping up in their area.”
Actual (not seasonally adjusted) activity was down 4.4 per cent in June 2012 compared to the same month last year. This marks the first year-over-year decline in national activity since April 2011.
Boosted by strong activity in March and April, a total of 257,193 homes traded hands over Canadian MLS® Systems in the first half of 2012. This is up 4.7 per cent from levels reported over the same period in 2011, and marks the strongest sales for the first half of any year since 2007.
“Home buyers didn’t rush their purchases before the most recently announced changes to mortgage regulations came into effect,” said Gregory Klump, CREA’s Chief Economist. “That’s a big change compared to what we saw as a response to previously announced changes. It will take some time before the compound effect of previous and recent changes to regulations on Canada’s housing market becomes apparent.”
The number of newly listed homes rose 1.4 per cent in June compared to May. The uptick was led by a second consecutive increase of new supply in Toronto. Some 42 local markets, out of 100 markets across the country, registered a monthly increase in new listings of at least one per cent.
The decline in sales activity combined with an uptick in new listings resulted in a more balanced national housing market in June. The national sales-to-new listings ratio, a measure of market balance, stood at 51.7 per cent in June 2012, compared to 53.1 per cent in May. Based on a sales-to-new listings ratio of between 40 to 60 per cent, nearly two thirds of all local markets were in balanced market territory in June as the number of sellers markets declined.
Nationally, the number of months of inventory stood at six months at the end of June, up slightly from 5.9 months of inventory at the end of May. The number of months of inventory represents the number of months it would take to sell current inventories at the current rate of sales activity, and is a further measure of the balance between housing supply and demand.
The actual (not seasonally adjusted) national average price for homes sold in June 2012 was $369,339, down 0.8 per cent from the same month last year. While average sale prices in June were up year-on-year in about seven out of every 10 local markets, the national average price continued to be skewed downward by compositional factors – most notably by fewer sales in Vancouver in recent months compared to stronger levels last year. By way of demonstrating the impact of compositional changes on the average calculation, netting Vancouver out of the national average price calculation yields a 3.2 per cent year-over-year increase.
The MLS® Home Price Index (MLS® HPI) is a more accurate measure of Canadian home price trends, since it is not distorted up or down by changes in the mix of sales (see Chart A). It tracks home price trends in five of Canada’s most active housing markets, including Greater Vancouver, the Fraser Valley, Calgary, Greater Toronto, and Montreal. These markets account for nearly half of all home sales activity over Canadian MLS® Systems.
The Aggregate Composite MLS® HPI rose 5.1 per cent from May to June 2012. This represents a slight deceleration from the 5.2 per cent gain reported in May.
The year-over-year increase was again highest in Greater Toronto (7.9%), followed by Calgary (5.6%), Greater Montreal (2.7%), the Fraser Valley (2.6%), and Greater Vancouver (1.7%).
Among Benchmark housing types tracked by the index, two-storey single family homes continued to post the strongest year-over-year growth in June (6.6%). Gains for one-storey single family homes (6.0%) also surpassed the rise in the overall index, while townhouses and apartments saw more modest gains (3.1% and 2.7% respectively).
Year-over-year-gains have moderated in all Benchmark housing categories except one-storey single family homes. Driven by increases in Greater Toronto and Calgary, prices in this category rose at the fastest pace in nearly two years in June.