Home Sales Dip Slightly in October
According to statistics released today by The Canadian Real Estate Association (CREA), national home sales activity and average price were little changed in October 2012.
- Home sales little changed (-0.1%) from September to October.
- Actual (not seasonally adjusted) activity down 0.8% from October 2011.
- Number of newly listed homes down 3.8% from September to October.
- Market remains firmly in balanced territory.
- National average home price unchanged (+0.02%) on a year-over-year basis.
- MLS® HPI up 3.6% in October – smallest gain since May 2011.
The number of home sales processed through the MLS® Systems of Canadian real estate Boards and Associations was little changed in October 2012 compared to the previous month (-0.1 per cent) and remains below levels reported in the first half of the year
Sales activity improved in about half of all local markets as compared to September, including Greater Vancouver and Greater Toronto. However, in keeping with the national trend, transactions there remain well below levels posted in the first half of the year.
On a year-over-year basis, actual (not seasonally adjusted) activity was also little changed, down 0.8 per cent from levels recorded for October of last year. Led by Calgary, sales were up compared to levels one year ago in almost two-thirds of all local markets. Sales remained below year-ago levels in Greater Toronto, Greater Vancouver, and Greater Montreal.
Sales data in October held steady at the national level, but we are seeing some diverging trends among local housing markets,” said CREA President Wayne Moen. “Markets in Alberta and Saskatchewan are gaining strength, while some of Canada’s traditionally most active markets have lost steam. As always, all real estate is local, so buyers and sellers should talk to their REALTOR® to understand how the housing market is shaping up where they live or might like to live.”
“Little has changed since national activity geared down in the wake of mortgage rules that came into force in July,” said Gregory Klump, CREA’s Chief Economist. “Opinions differ about how sharply sales have slowed depending on the local housing market.”
National sales in October were on par with the same month last year and in line with the 10-year average for the month (Chart 1). Activity for the year-to-date is also running in line with the 10 year average (Chart 2).
“These results suggest that the Canadian housing market overall has returned to a more sustainable pace,” added Klump.
A total of 402,322 homes have traded hands via Canadian MLS® Systems over the first 10 months of 2012, up 0.8 per cent from levels reported over the same period last year and 0.4 per cent below the 10-year average for the period.
The number of newly listed homes retreated by 3.8 per cent in October following a jump in September. Monthly declines were reported in almost two-thirds of all local markets, with Greater Toronto and Greater Vancouver exerting a large influence on the national trend.
The monthly decline in new listings caused the national sales-to-new listings ratio to edge back up to 50.9 per cent in October compared to September’s reading of 49 per cent. Based on a sales-to-new listings ratio of between 40 to 60 per cent, nearly two-thirds of all local markets were in balanced market territory in October.
The number of months of inventory is another important measure of the balance between housing supply and demand. It represents the number of months it would take to sell current inventories at the current rate of sales activity. It was another measure that was little changed in October. Nationally, there were 6.5 months of inventory at the end of October. This is virtually unchanged from the reading of 6.4 months at the end of September after accounting for rounding (6.479 in October vs. 6.448 in September).
The actual (not seasonally adjusted) national average price for homes sold in October 2012 was $361,516. This represents an increase of $80, or 0.02 per cent compared to the national average price in October 2011.
The national average price continues to be influenced by compositional factors, most notably by fewer sales in Greater Vancouver this year compared to much stronger levels last year, and more recently by fewer sales in Greater Toronto.
Excluding these two markets from the national average price calculation yields a year-over-year increase of 2.5 per cent, reflecting average sale prices that rose in 70 per cent of all local markets in October 2012.
Unlike average price, the MLS® Home Price Index (MLS® HPI) is not affected by changes in the mix of sales, so it provides the best gauge of Canadian home price trends.
The Aggregate Composite MLS® HPI rose 3.6 per cent on a year-over-year basis in October. This marks the sixth consecutive month in which the price gain slowed and is the slowest rate of increase since May 2011.
Year-over-year price gains decelerated for all Benchmark property types tracked by the index with the exception of the townhouse/row segment. The townhouse/row segment nonetheless posted the slowest price growth among Benchmark properties.
Year-over-year price growth remains strongest for one-storey single family homes (+5.3 per cent) and two-storey single family homes (+4.5 per cent). Prices for townhouse and apartment units continue to post more modest gains, rising 1.2 per cent and 1.5 per cent respectively.
Most markets continued to see positive but slowing year-over-year price growth in October. The exceptions were Calgary, where price growth accelerated, and Greater Vancouver, where the year-over-year price decline was smaller in October than it was in September.
The MLS® HPI rose fastest in Regina (13.0 per cent year-over-year), but the increase was smaller than it was in September (14.2 per cent).
The MLS® HPI also climbed in Calgary (6.8%), Greater Toronto (5.1%), Greater Montreal (1.8%), and the Fraser Valley (1.5%). In Greater Vancouver, the MLS® HPI eased 0.8 per cent year-over-year in October.