Both Canadian home sales and prices rose last month according to the latest data released by the Canadian Real Estate Association.
Monthly housing sales increased by 1.4 percent, up 5 percent year-on-year; newly listed houses rose by 1.1 percent; multi-listed system (MLS) house price index HPI rose by 0.8 percent, up 0.9 percent year-on-year; national average selling price rose by 3.9 percent
Buyers return to the market
The national MLS system recorded a 6-month increase in house sales for the month, which is nearly 17% higher than the lowest sales in February of this year, but still almost 10% lower than the 2016 and 2017 peaks.
Among them, Winnipeg’s housing sales reached a new high in the month, and the Fraser Valley continued to rise on the basis of the increase last month. Moncton’s sales in the month fell the most. In most of the big cities like Calgary, Winnipeg, Greater Toronto, Ottawa, and Montreal, house sales in the month rose year-on-year.
Experts believe the fixed interest rate cut in the past five years has eased the mortgage pressure test. Also, some housing prices have fallen, which has caused some buyers who have been hoping to return to the market, but the mortgage stress test will continue to limit people’s loan capacity. This will further affect future housing sales trends in different regions.
A nearly balanced housing market
The newly listed listings and sales volume of the month were similar, which increased the ratio of home sales in Canada from 60.0% in July to 60.1%. In recent months, this ratio has exceeded the long-term average of 53.6%, indicating that supply and demand have become tight and housing prices have been rising.
According to the ratio and the length of time that the ratio exceeds the long-term average, it can be judged whether the housing market is beneficial to the seller or the buyer. If the ratio is within the standard deviation of the long-term average, the market is in equilibrium. The data comparison shows that nearly 3/4 of the country’s market in the month is a balanced market.
The time of sale varies from place to place
Another important index to judge the status quo of the market is the number of months of inventory (MOI). The MOI of Canada last month was 4.6 months, the lowest since December 2017. In fact, the Canadian MOI is getting below the long-term average of 5.3 months, but because it is the Canadian average, it is difficult to reflect the specific situation in different regions.
For example, the Prairies and Newfoundland MOI are much higher than the long-term average, indicating that buyers in these regions have more choices. In contrast, the MOIs in Ontario, Quebec and the Maritimes are far below the long-term average, indicating that competition among buyers is fierce and housing prices are under pressure. The MOI in the Lower Mainland of BC shows a balanced market and stable housing prices.
House Prices Rose East and West
In the month, the Canadian MLS house price index rose by 0.8 percent from the previous month, the largest increase in the past two years. Among the 18 cities in the country, the price index of 14 cities has increased from the previous month. Among them, the housing price index of BC and Prairie has been falling, but it has generally stabilized in recent months. In contrast, housing prices in the Dajin Horseshoe District of Ontario began to rebound.
In the month, Canada’s MLS comprehensive house price index rose by 0.9% year-on-year. House prices not only rose for the second consecutive month, but also the biggest year-on-year increase since the end of last year, but the difference between the two places is large, that is, the east rises and falls.
Among them, the Greater Vancouver and Fraser Valley fell 8.3 percent and 5.5 percent, while Vancouver Island and Okanagan Valley rose 3.7 percent and 1.5 percent. The grassland province’s year-on-year increase was also moderate. But, in most areas of the Dajin Horseshoe District in Ontario, the year-on-year increase in house prices far exceeded the price increase. In the past few years, prices in Ottawa, Montreal and Moncton have continued to rise.
In the month, the price index of all types of housing increased year-on-year. Among them, the price index of the two-storey independent house rose by 1.2 percent year-on-year. House price rose by 0.7 percent, while townhouses and apartments rose slightly by 0.3 percent and 0.5 percent respectively.
In August, the actual average house price in Canada was $493,500 Canadian dollars, up nearly 4 percent year-on-year. Excluding the two highest-priced cities, such as the Greater Vancouver area and most of the districts, the average price of Canadians in that month was less than $393,000, a year-on-year increase of only 2.7 percent.
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