Canadian home sales activity moderates in May – Metro Vancouver Real Estate Update June 2012
According to statistics released by The Canadian Real Estate Association (CREA), national resale housing activity softened in May 2012 compared to April.
- Home sales down 3.1% from April to May.
- Actual (not seasonally adjusted) up 9% from levels in May 2011.
- The year-over-year increase continues to reflect the slowdown in sales a year ago following changes to mortgage rules that came into effect in March 2011.
- The number of newly listed homes edged up 0.3% from April to May.
- Easing sales activity and a small uptick in new listings resulted in a more balanced national housing market.
- The national average home price edged down 0.3% on a year-over-year basis in May.
Sales over MLS® Systems of real estate Boards and Associations in Canada declined by 3.1 per cent in May compared to April 2012. Having posted the first monthly decline since January, activity ran only slightly above the five- and ten-year averages for May.
“Returning to an average level of sales activity still leaves Canada’s housing market in great shape,” said Wayne Moen, CREA President. “The expected continuation of low interest rates will keep housing markets stable and homeownership affordable and within reach for many buyers in the months ahead.”
Activity receded in about 60 per cent of all local markets in May as compared to April, led by the Greater Toronto Area, where sales nonetheless remained above levels recorded over most of last year. Monthly sales declines elsewhere overshadowed improving activity in the Ottawa-Gatineau region as well as in Newfoundland and Labrador.
Actual (not seasonally adjusted) activity remained nine per cent above levels in May 2011, and also stood above the reading for May sales in the previous three years by a similar margin, reflecting volatile spring markets in each of the past four years.
For the third straight month, the number of newly listed homes was little changed in May, edging up just 0.3 per cent from April. The number of markets in which new listings either rose or held steady (49) ran almost even with those where new listings eased (52).
Moderating sales activity and a small uptick in new listings resulted in a more balanced national housing market in May. The national sales-to-new listings ratio, a measure of market balance, stood at 53.4 per cent in May 2012, down from its April reading of 55.3 per cent. Based on a sales-to-new listings ratio of between 40 to 60 per cent, more than half of all local markets were in balanced market territory in May.
Nationally, the number of months of inventory stood at 5.9 months at the end of May, up from the April reading of 5.7 months. The number of months of inventory represents the number of months it would take to sell current inventories at the current rate of sales activity, and is a further measure of the balance between housing supply and demand.
The actual (not seasonally adjusted) national average price for homes sold in May 2012 was $375,605, down 0.3 per cent from the same month last year. While the national average price is more or less flat compared to last spring, average sale prices were up from year-ago levels in about seven of every ten local Canadian markets.
“Activity in Greater Toronto is stronger this spring than it was last year, and higher-priced homes are still selling quickly. As Canada’s most active housing market, and one of the priciest, it is still the biggest factor boosting the national average price but its support was less of a factor in May,” said Gregory Klump, CREA Chief Economist. “At the same time, national average price is finding support from Calgary, where sales and average selling prices are up from levels in May last year. Overall, price growth remains modest amid balanced market conditions in much of the rest of Canada.”
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