November 2017 saw national home sales rise for the fourth month in a row, up 3.9 per cent from October, according to statistics released by the Canadian Real Estate Association (CREA). Home sales in the Greater Toronto Area (GTA) increased by 16 per cent, accounting for more than two-thirds of the national increase. The continued rebound put November sales activity slightly over halfway between March 2017’s peak in sales, and the low reached in July.
Actual (not seasonally adjusted) activity increased 2.6 per cent year-over-year, setting a new record for the month of November. It was the first year-over-year increase recorded since March and was not due to activity in the GTA, where sales remain down significantly from year-ago levels. Some other large markets posted year-over-year activity gains, including Greater Montreal and the Fraser Valley, Calgary, Edmonton, Ottawa and Montreal.
“Some home buyers with more than a 20 per cent down payment may be fast-tracking their purchase decision in order to beat the tougher mortgage qualifications test coming into effect next year,” said Andrew Peck, CREA president, in a press release. “Evidence of this is mixed and depends on the housing market. It will be interesting to see whether December sales show further signs of home purchases being fast-tracked.”
“National sales momentum remains positive heading toward year-end,” said Gregory Klump, CREA’s chief economist. “It remains to be seen whether stronger momentum now will mean weaker activity early next year once new mortgage regulations take effect beginning on New Year’s Day.”
The number of newly listed homes across the country increased 3.5 per cent month-over-month in November, which is partly due to a large increase in new supply across the GTA.
Since sales and new listings climbed by similar amounts, the national sales-to-new listings ratio was 56.4 per cent in November, only slightly changed from a ratio of 56.2 per cent in October, indicating the national real estate market remains balanced. Based on a comparison of the sales-to-new listings ratio with its long-term average, more than half of all local markets sat in the balanced range in November 2017.
The MLS Home Price Index (HPI) climbed 9.3 per cent year-over-year in November 2017. This is a further deceleration in year-over-year price gains that began in the spring, and the smallest increase since February 2016. This deceleration in price gains is largely due to softening price trends in the Greater Golden Horseshoe (GGH) housing markets tracked by the index, especially for single-family homes.
Apartment units saw the largest year-over-year price gains, with the average price of an apartment unit climbing 19.4 per cent in November, followed by townhouse/row units (up 12.3 per cent), one-storey single family homes (up six per cent) and two-storey single-family homes (up 5.3 per cent).
Benchmark home prices were up compared to November 2016 in 11 of the 13 markets tracked by the HPI. Benchmark home price increases ranged between 18.5 per cent in Fraser Valley and Vancouver Island, to 0.3 per cent in Calgary. Meanwhile, benchmark home prices fell in Regina and Saskatoon (decreasing by -3.5 per cent and -4.1 per cent year-over-year, respectively).
The actual (not seasonally adjusted) national average price for homes sold in November 2017 was just below $504,000, up 2.9 per cent compared to year-ago levels. The national average price is heavily skewed by sales in the Greater Toronto and Greater Vancouver regions. With these two regions removed from calculations, the national average price falls more than $120,000 to just above $381,000.
