Home sales in Canada increased 0.8 percent in February compared to January, bringing housing transactions to their highest level since 2007. Toronto, Okanagan Region and Fraser Valley led sales, offsetting declines in Edmonton, Greater Moncton and Montreal.
The Canadian Real Estate Association reports actual (not seasonally adjusted) activity jumped 18.7 percent year over year.
“Two of Canada’s hottest housing markets look set to stay that way heading into the spring home buying season,” said CREA President Pauline Aunger. “Meanwhile, other major urban markets elsewhere in Canada are well balanced or have ample supply.
The national sales-to-new listings ratio rose to 59.5 percent in February 2016 versus 59.3 percent the previous month for the highest reading since November 2009. A sales-to-new listings ratio between 40 and 60 percent is generally consistent with balanced housing market conditions, with readings below and above this range indicating buyers’ and sellers’ markets respectively.
The Canadian housing market has tightened to its lowest levels in almost six years. At the end of February a 5.2 month supply of inventory was available at the current sales pace.
Home pricing saw its highest gain since June 2010, jumping 8.49 percent year over year, according to the Aggregate Composite MLS Home Price Index. The actual (not seasonally adjusted) national average price for homes sold in February 2016 was $503,057, up 16.4 percent on a year-over-year basis. The pricing is pulled upward by sales in the expensive housing markets of Vancouver and Toronto. Excluding those areas, the average price is $335,235.
“The number of single family home sales above one million dollars is rising in Greater Vancouver and the GTA,” said Gregory Klump, CREA’s Chief Economist. “Tightened mortgage regulations apply to homes selling above five hundred thousand dollars and below a million dollars. The tighter regulations combined with a short supply of single family homes will restrain transactions below one million dollars. If recent trends continue, home sales above one million dollars will account for a greater share of activity and will further fuel year-over-year average price increases in these markets. Meanwhile, price growth will remain more modest in other housing markets that don’t have an ongoing or developing supply shortage like the kind we’re seeing in the Lower Mainland of British Columbia or around the GTA.”
(Source: Canadian Real Estate Association)
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