National home sales recorded via the Canadian MLS System held steady from September to October 2019, according to statistics from the Canadian Real Estate Association (CREA).
Since last year at this time, activity was up 12.9 per cent and the national average sale price was around $525,000, climbing 5.8 per cent. But excluding sales in the Greater Toronto Area (GTA) and Greater Vancouver Area (GVA), the national average price drops to about $400,000.
Transactions, meanwhile, rose in 80 per cent of all local markets in October, including all of Canada’s largest urban markets. Sales activity is now almost 20 per cent above the six-year low reached in February 2019, but remains 7 per cent below heights reached in 2016 and 2017.
There was an almost even split between the number of local markets where activity rose and those where it declined. Higher sales in GVA, the neighbouring Fraser Valley and Ottawa, offset a monthly decline in activity in the GTA—particularly in Central Toronto—and Hamilton-Burlington.
“Steady national activity in October hides how the mortgage stress-test remains a drag on many local housing markets where the balance between supply and demand favours homebuyers in purchase negotiations,” said Jason Stephen, president of CREA. “That said, all real estate is local, so market balance varies depending on location, housing type, and price segment.”
The number of newly listed homes fell by 1.8 per cent in October, with the GTA and Ottawa recording the largest declines. Almost a third of all housing markets posted a monthly decline of at least 5 per cent, while about a fifth of all markets posted a monthly increase of at least 5 per cent.
“It’s a full-blown buyer’s market or on the cusp of one in a number of housing markets across the Prairies and in Newfoundland,” said Gregory Klump, CREA’s chief economist. “Homebuyers there have the upper hand in purchase negotiations and the mortgage stress-test has contributed to that by reducing the number of competing buyers who can qualify for mortgage financing while market conditions are in their favour.”
Steady sales and fewer new listings further tightened the national sales-to-new listings ratio to 63.7 per cent. This measure has been increasingly rising above its long-term average of 53.6 per cent. Its current reading suggests that sales negotiations are becoming increasingly tilted in favour of sellers; however, the national measure continues to mask significant regional variations.
Based on a comparison of the sales-to-new listings ratio with the long-term average, just over two-thirds of all local markets were in balanced market territory in October 2019, including the GTA and Lower Mainland of British Columbia. Still, sales negotiations continue to favour buyers in housing markets located in Alberta, Saskatchewan and Newfoundland & Labrador.
Home Price Trends
The aggregate MLS Home Price Index rose 0.6 per cent, marking its fifth consecutive monthly gain.
Recently, home price trends have generally been stabilizing in the Lower Mainland and the Prairies. While that remains the case in Calgary and Saskatoon, home prices in Edmonton and Regina have moved lower. By contrast, home price trends have started to recover in the GVA and the neighbouring Fraser Valley.
Meanwhile, price growth continues to rebound in the Greater Golden Horseshoe (GGH). In markets further east, price growth has been trending higher for the last three or four years.
Declines have mostly been seen in western Canada and price gains in eastern Canada.
In the GVA and Fraser Valley, declines are becoming smaller at -6.4 per cent and 4.2 per cent, respectively, but are still below year-ago levels.
Calgary, Edmonton and Saskatoon posted price declines in the range of -1.5 per cent to -2.5 per cent on a y-o-y basis in October, while the gap between this year and last year widened sharply to -6.8 per cent in Regina.
In Ontario, price growth has re-accelerated well ahead of overall consumer price inflation across most of the GGH. Meanwhile, price growth in recent years has continued uninterrupted in Ottawa, Montreal and Moncton.
