Canadian home sales hold steady in August

According to statistics1 released today by The Canadian Real Estate Association (CREA), national resale housing activity in August 2011 remained stable for the second consecutive month. Highlights: • Sales activity was stable from July to August, but posted another big year-over-year gain reflecting weakened demand last summer. • Year-to-date sales pulled ahead of 2010 levels for the first time this year, and remain in line with the ten-year average. • The number of newly listed homes was also little changed from July to August. • The national housing market stayed firmly entrenched in balanced territory. • There were more balanced local markets in August than at any other time on record. • The national average price posted another year-over-year gain in August, but has moderated from elevated levels earlier this year. • Upward skewing of the national average price is diminishing due to fewer expensive sales and a declining share of national activity in Vancouver and Toronto. For a second consecutive month, national home sales activity held steady in August 2011 when compared to the previous month. Among major urban centres, Toronto and Ottawa posted a monthly increase in activity while Calgary, Montreal and Vancouver saw activity decline slightly. “The housing market in Canada remained on a firm footing in August when compared to volatile financial markets,” said Gary Morse, CREA President. “Through their actions, homebuyers are showing that they remain confident about the stability of the Canadian housing market, and recognize that the continuation of low interest rates represents an excellent opportunity to buy their first home or trade up.” Actual (not seasonally adjusted) sales activity came in 15.8 per cent above national levels reported one year earlier. This was the largest year-over-year increase since last April, but largely reflects weakened activity one year ago. A total of 324,030 homes have traded hands via Canadian MLS® Systems so far this year. While this stands only marginally above levels in the first eight months of last year, it nevertheless marks the first time this year that year-to-date activity has pulled ahead of 2010 levels. As has been the case for much of this year, the year-to-date sales figure continues to run in line with the ten-year average. The number of newly listed homes nationally was also little changed from July to August. This kept the national housing market firmly planted in balanced territory. The national sales-to-new listings ratio, a measure of market balance, stood at 51.6 per cent in August, unchanged compared to July. Based on a sales-to-new listings ratio of between 40 to 60 per cent, 70 per cent of all local markets in Canada were in balanced market territory in August – a greater percentage than at any other time on record. There were just 12 buyers’ markets in August, which was the lowest figure so far this year. The number of months of inventory stood at 6.2 months at the end of August on a national basis, which is little changed from the end of July (6.1 months). The national months of inventory figure has been stable at about six months since April. 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 another measure of the balance between housing supply and demand. The actual (not seasonally adjusted) national average price for homes sold in August 2011 stood at $349,916. This is 7.7 per cent above its year-ago level, which marked the low point for 2010. The national average price has moderated compared to earlier this year, with sales activity in Vancouver, and more recently in Toronto, exerting less of an effect on the national average. Their share of provincial and national sales activity reached unusually elevated levels earlier this year, but has since receded in line with normal seasonal variations. “Once again, economic and financial market headwinds outside Canada are keeping interest rates lower for longer,” said Gregory Klump, CREA’s Chief Economist. “Those headwinds will likely persist until, and indeed after, fiscal quagmires in the U.S. and Europe are resolved. In the meantime, the Bank of Canada will have ample reason to delay raising interest rates further, which is supportive for the Canadian housing market.” PLEASE NOTE: The information contained in this news release combines both major market and national MLS® sales information from the previous month. CREA cautions that average price information can be useful in establishing trends over time, but does not indicate actual prices in centres comprised of widely divergent neighbourhoods or account for price differential between geographic areas. Statistical information contained in this report includes all housing types. MLS® is a co-operative marketing system used only by Canada’s real estate Boards to ensure maximum exposure of properties listed for sale. The Canadian Real Estate Association (CREA) is one of Canada’s largest single-industry trade associations, representing more than 100,000 REALTORS® working through more than 100 real estate Boards and Associations. Further information can be found at http://www.crea.ca/public/news_stats/media.htm. 1 All figures in this release, unless otherwise noted, are seasonally adjusted to remove normal seasonal variation. Removing regular seasonal variations enables analysis of monthly changes and fundamental trends in the data.