The Canadian Real Estate Association (CREA) reported a dip in national home resales of 2.8 per cent in May on the heels of a record-setting April. Last month’s sales activity (without seasonal adjustment) was up 9.6 per cent year over year and topped the 10-year average for the month by 15.1 per cent.
Roughly 70 per cent of local markets saw sales activity decline from April to May as two-thirds of local markets saw supply drop, with new listings shrinking 3.2 per cent month to month.
“Many of the housing markets in B.C. and Ontario that led the monthly decline in national sales are also places where months of inventory have fallen to all-time lows,” said Gregory Klump, chief economist at CREA. “This suggests a lack of supply may be starting to rein in sales amid a continuation of strong housing demand.”
The national sales-to-new-listings ratio reached its tightest reading since October 2009, rising to 64.8 per cent in May. That puts the ratio above the 40 to 60-per-cent range indicating balanced housing market conditions, suggesting it’s a sellers’ market.
Months of inventory have trended downward since early 2015 and are now at their lowest level in more than six years. The national measure of 4.7 months of inventory at the end of last month exceeded the two months or less of inventory available in an increasing number of local markets in B.C. as well as the GTA and southwestern Ontario.
The national average sale price rose 13.2 per cent compared to the previous May, while the Aggregate Composite MLS Home Price Index, which controls for the changing mix of housing sold month to month, was up 12.5 per cent year over year. The breakdown for price growth across the index’s benchmark property types amounted to a 14.7-per-cent increase for two-storey single-family homes, a 12.7-per-cent increase for one-storey single-family homes, an 11.6-per-cent increase for townhouse/row units and an 8.6-per-cent increase for apartment units.
Price gains varied widely between local markets, from 29.7 per cent in Greater Vancouver, to 15 per cent in Greater Toronto, to -3.9 per cent in Calgary.
Greater Vancouver and Greater Toronto also continued to have an outsized impact on the national average price, which rose 13.2 per cent to $509,460 in May. Those figures fall to an increase of 9.1 per cent to $375,532 when these local markets are left out of the equation.
