Canadian Real Estate Sales Drop with Prices Rising Slightly
The Canadian Real Estate Association reported today that national home sales rose 1.3 per cent from December to January, but in year over year the real estate industry dropped 5.2 per cent.
Approximately half of Canadian real estate markets saw a rise in January, in comparison to December 2012, such as Greater Toronto and Greater Vancouver which came in at 5.6 per cent and 4.7 per cent respectively. Sales in Edmonton led the increase through its 10 per cent jump. These increases helped offset some softer markets that saw slower sales such as Ottawa, the Fraser Valley, Montreal, Regina, London and St. Thomas, and Calgary.
“There is little news to report about national sales activity, which continues to hold fairly steady at the lower levels first reached when mortgage rules were tightened in mid-2012,” said CREA President Wayne Moen. “That said, things are becoming more interesting among local markets, with improving sales in Vancouver and Toronto likely to come as something of a surprise to some. As always, all real estate is local, so buyers and sellers should speak to their REALTOR® to understand how the housing market is shaping up where they live or are considering to live.”
The decline year over year was due to two-thirds of local markets seeing decreases in sales activity in January. Those that were an exception to the rule include Calgary, Edmonton, Winnipeg, Windwsor-Essex and Guelph.
“Year-over-year declines in activity have received attention lately, and understandably so since they’re more exciting compared to the fairly steady month-over-month trend for national sales following changes made last year to mortgage regulations and lending guidelines,” said Gregory Klump, CREA’s Chief Economist. “If national sales activity remains stable near the levels we’ve been seeing since last August, then year-over-year comparisons will begin fading after the crucial spring buying season. Until then, the focus may remain on how sales were stronger in the first half of last year compared to lower but stable national activity since then.”
On the other hand, Canada’s national average home price was $354,754, a two per cent increase year over year. While the Aggregate MLS Home Price Index saw an even further increase of 3.1 per cent in comparison to January 2012 which is the ninth month in which the markets have seen less of a gain and the “slowest rate increase since April 2011.”