Canadian home sales saw a small 1.3-per cent gain in August 2017, according to statistics recently released by The Canadian Real Estate Association (CREA), of homes sold through Canadian MLS Systems.
The monthly rebound in Greater Toronto Area (GTA) sales of 14.3 per cent from July fueled the national increase. Home sales activity was flat for areas outside the GTA, and although it was the first monthly increase in activity since Ontario’s Fair Housing Policy was announced, home sales activity in the GTA remained well down compared to the peak reached in March.
Actual home sales activity not seasonally adjusted was down 9.9 per cent in August over last year in about 60 per cent of local markets, led by the GTA and surrounding areas.
“Experience shows that homebuyers watch mortgage rates carefully, and that recent interest rate increases will prompt some to make an offer before rates move higher, while moving others to the sidelines,” says CREA President Andrew Peck.
The number of newly listed homes fell 3.9 per cent in August, marking a third consecutive monthly decline. The national result largely reflects a reduction in newly listed homes in the GTA, Hamilton-Burlington, London-St. Thomas and Kitchener-Waterloo, as well as the Fraser Valley.
A decline in new listings has firmed market balance in a number of Greater Golden Horseshoe housing markets where it had recently begun tilting toward buyers’ market territory.
The Aggregate Composite MLS HPI rose by 11.2 per cent in August compared to last year, representing a further deceleration since April. The deceleration in price gains largely reflects softening price trends in Greater Golden Horseshoe housing markets tracked by the index.
Price gains diminished in all benchmark categories. Apartment units posted a 19 per cent gain, the largest year-over-year gain in August followed by 14.4 per cent for townhouse/row units and 8.3 per cent and 8.1 per cent, respectively, for two-storey single-family homes and one-storey single-family homes. Price trends continued to vary widely by region.
In Greater Toronto, Oakville-Milton and Guelph, price gains slowed further on a year-over-year basis, although prices in those markets remain well above year-ago levels.
In other areas: Benchmark home prices in the Lower Mainland of British Columbia have recovered and are now at new highs, with a year-over-year gain of 9.4 per cent and 14.8 per cent for Greater Vancouver and the Fraser Valley, respectively. Home price increases in Victoria have slowed to about 16 per cent on a year-over-year basis and are still running at about 20 per cent elsewhere on Vancouver Island.
Calgary price growth remained in positive territory, up eight per cent.
In Ottawa, price growth accelerated by 5.9 per cent, led by a seven-per cent increase in one-storey single family home prices.
There was a 3.9-per cent increase in the (not seasonally adjusted) national average price for homes sold in August at $472,247, but that number is heavily influenced by sales in Greater Vancouver and Greater Toronto. Excluding these two markets from calculations trims almost $100,000 from the national average price to $373,859.
“Time will tell whether the monthly rise in August sales activity marks the beginning of a rebound, particularly in the Greater Golden Horseshoe region and other higher-priced urban centres,” says Gregory Klump, CREA’s chief economist. “The picture will become clearer once mortgages that were pre-approved prior to recent interest rate hikes expire.”