Home sales edge higher
OTTAWA – While national home sales via its Multiple Listing Service (MLS) showed marginal improvement in March over February, they fell 4.6% year-over-year, according to the latest statistics from the Canadian Real Estate Association (CREA). New listings rose 2.1% month-over-month while the national average price fell 1.8% from March 2018.
The realtors’ group noted sales via its MLS edged up 0.9% in March 2019 following a sharp drop in February, leaving activity near some of the lowest levels recorded in the last six years.
It also reported there was an even split between the number of markets where sales rose from the previous month and those where they waned. Among Canada’s larger cities, activity improved in Victoria, the Greater Toronto Area (GTA), Oakville-Milton and Ottawa, whereas it declined in the Greater Vancouver Area (GVA), Edmonton, Regina, Saskatoon, London and St. Thomas, Sudbury and Quebec City.
Actual sales fell 4.6% year-over-year to the weakest level seen for the month of March since 2013. It was also almost 12% below the month’s ten-year average. In British Columbia, Alberta and Saskatchewan, sales were more than 20% below their ten-year average. By contrast, activity is running well above-average in Quebec and New Brunswick.
“March results suggest local market trends are largely in a holding pattern,” CREA chief economist Gregory Klump said in a statement. “While the mortgage stress test has made access to home financing more challenging, the good news is that continuing job growth remains supportive for housing demand and should eventually translate into stronger home sales activity pending a reduction in household indebtedness.”
The number of new listings rose 2.1% in March. New supply rose in about two-thirds of all local markets, led by Winnipeg, Regina, Victoria and elsewhere on Vancouver Island. By contrast, new listings declined in the GTA, Ottawa and Halifax-Dartmouth.
CREA also said this measure of market balance has largely remained close to its long-term average of 53.5% since early 2018 and two-thirds of all local markets were in balanced market territory in March 2019.
The actual national average price for homes sold in March 2019 was $481,745. That’s down 1.8% from the same month in 2018. Excluding the GTA and GVA – Canada’s most active and expensive markets – cuts close to $100,000 from the national average price, trimming it to just under $383,000.
In his research note, Rishi Sondhi of TD Economics described March’s recovery in home sales as “half-hearted” while pointing out sales for the first quarter of 2019 fell 2.7% and were essentially a drag on Canada’s overall economic performance.
“The downward surprise in Q1 sales is largely explained by two factors: poor weather and mortgage rates not yet matching the sharp decline in bond yields,” he explained, adding both conditions should see signs of improvement over the coming months.
"A modest improvement in sales is anticipated over the remainder of 2019, as demand is supported by resilient labour markets and healthy population growth,” Sondhi said. “However, past rate hikes are still working their way through the system, providing a counter to these positive forces.”
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