Canadian residential property market broadly stable in July, latest data shows
29-08-2012
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Prices are off their recent peaks in Greater Vancouver and Greater Toronto, but remain above year ago levels in most markets.
The number of local housing markets was roughly evenly split between those that saw month on month gains and those that posted monthly declines. Activity was up from the previous month in Kingston, Chilliwack, and Calgary, offset by fewer sales in Toronto, Newfoundland and Labrador, and Edmonton.
Actual, not seasonally adjusted, activity was up 3.3% year on year in July 2012, with gains in Calgary and slower sales in Vancouver.
One and two storey single family homes posted the strongest year on year growth in July, with two storey single family home prices up 5.8% and one storey single family prices up 5.6%.
Prices for townhouse and apartment units continue to see more modest gains, rising 2.5% and 2.2% respectively on a year on year basis in July 2012.
The MLS® HPI posted the largest year on year increase in Greater Toronto at 7.1%, followed by Calgary at 6%, the Fraser Valley at 2.5%, Montreal at 2.1%, and Greater Vancouver at 0.6%. Price gains in July were smaller than they were the previous month in all of these markets except Calgary.
‘Recent changes to mortgage regulations were widely expected to temper sales and prices in Greater Toronto and Greater Vancouver, and the data released today confirms that,’ said Wayne Moen, CREA president.
Some first time home buyers may have difficulty qualifying for mortgage financing due to shortened amortization periods included in recent changes to mortgage regulations, according to Gregory Klump, CREA’s chief economist.
‘As the lynchpin of the housing market, lower first time buying activity will have knock-on effects over the rest of the market. It will likely take more time for move-up buyers to sell their current home,’ he explained.
The number of newly listed homes fell 3.3% in July compared to June, with declines in more than half of all local markets including Montreal, Toronto, Vancouver, the Fraser Valley, Calgary, and Edmonton.
CREA said that the national housing market remains firmly entrenched in balanced market territory, supported by stable sales activity and fewer new listings. The national sales-to-new listings ratio, a measure of market balance, stood at 53.4% in July 2012, up from 51.6% in June. Based on a sales-to-new listings ratio of between 40 to 60%, two thirds of all local housing markets were in balanced market territory in July.
The national number of months of inventory is another measure of market balance. It represents the number of months it would take to sell current inventories at the current rate of sales activity. It stood at 6.1 months at the end of July, unchanged from the June reading. The months of inventory measure has been hovering around six months since the end of 2010.
Average sale prices in July were up from levels one year ago in about seven of every 10 local markets, but declining sales activity in Greater Vancouver continues to impact the national average price.
The actual, not seasonally adjusted, national average price for homes sold in July 2012 was $353,147, down 2% from the same month last year. Excluding Greater Vancouver from the national average price calculation yields a year on year increase of 1.1%.
Unlike average price, the MLS® Home Price Index (MLS® HPI) is not affected by changes in the mix of sales, so it provides a better gauge of Canadian home price trends. The index tracks home price trends in five of Canada’s most active housing markets, including Greater Vancouver, the Fraser Valley, Calgary, Greater Toronto, and Montreal. These five markets comprise approximately 45 per cent of all home sales activity in Canada.
The MLS® HPI rose 4.5% year on year in July 2012. This was the third time in as many months that the year-over-year gain shrank, and marks the slowest rate of increase in over a year.
