According to statistics released today by The Canadian Real Estate Association (CREA), national home sales activity posted its third consecutive month-over-month decline in December 2013.
Highlights:
- National home sales fell 1.8% from November to December.
- Actual (not seasonally adjusted) activity stood 12.9% above weak December 2012 levels.
- The number of newly listed homes dropped 4.3% from November to December.
- The Canadian housing market remains in balanced territory.
- The national average sale price rose 10.4% on a year-over-year basis in December.
- The MLS® Home Price Index (HPI) rose 4.3% year-over-year in December.
The number of home sales processed through the MLS® Systems of Canadian real estate Boards and Associations and other co-operative listing systems was down 1.8 per cent on a month-over-month basis in December 2013, marking the third straight monthly decline. Activity now stands 5.2 per cent below the peak reached in September 2013 (Chart A).
Sales were down on a month-over-month basis in about 60 per cent of all local markets in December, with declines in Calgary, Edmonton, and Greater Toronto more than offsetting gains in Greater Vancouver and the Fraser Valley, as well as a sizeable rebound from a quiet November in St. Catherines.
“Activity has gradually eased back from stronger than expected levels last summer and is now roughly in line with the ten year monthly average,” said CREA President Laura Leyser. “We’ll likely continue getting mixed signals in the months ahead, with positive year-over-year comparisons for sales masking the recent moderation in the monthly sales trend. As always, local housing market trends can be very different than national ones, so your REALTOR® remains your best bet for understanding how the market is shaping up where you live or might like to.”
Actual (not seasonally adjusted) activity was up 12.9 per cent from December 2012. Yearover-year increases were posted in about 70 per cent of all local markets, led by gains in Greater Vancouver, the Fraser Valley, Calgary, Edmonton, Greater Toronto, and Hamilton-Burlington. A total of 457,893 homes traded hands via MLS® Systems of Canadian real estate Boards and Associations and other cooperative listing systems across the country in 2013. This represents an increase of 0.8 per cent compared to 2012 (Chart B).
“National sales activity has softened in recent months and is expected in 2014 to remain down from levels reached last September,” said CREA Chief Economist Gregory Klump. “That said, absent further mortgage rule changes, sales in 2014 may surpass the annual total for 2013 if demand holds steady near current levels as strengthening economic and better job growth offset the impact of further expected marginal mortgage interest rate increases.”
The number of newly listed homes fell 4.3 per cent on a month-over-month basis in December. New supply was down in two-thirds of all local markets, led by declines in Calgary, Greater Toronto, and Hamilton-Burlington.
With new listings having eased by more than sales, the national sales-to-new listings ratio climbed to 55 per cent in December compared to 53.6 per cent in November. This indicates a slightly firmer housing market but remains well within balanced territory marked by the range from 40 to 60 per cent, as has been the case since early 2010. Slightly more than half of all local markets posted a sales-to-new listings ratio in this range.
The number of months of inventory is another important measure of balance between housing supply and demand. It represents the number of months it would take to completely liquidate current inventories at the current rate of sales activity.
There were 6.2 months of inventory at the national level at the end of December, up from 6.1 months at the end of November. As with the sales-to-new listings ratio, the current level of the months of inventory measure indicates that the Canadian housing market remains well balanced.
The actual (not seasonally adjusted) national average price for homes sold in December 2013 was $389,119, an increase of 10.4 per cent from the same month last year. The size of year-over-year average price gains continues to reflect the decline in sales activity last year among some of Canada’s most active and expensive markets, which dropped the national average at that time. Removing Greater Vancouver and Greater Toronto from national average price calculations cuts the year-over-year increase to 4.6 per cent.
The MLS® Home Price Index (MLS® HPI) provides a better gauge of price trends because it is not affected by changes in the mix of sales activity the way that average price is.
The Aggregate Composite MLS® HPI rose 4.31 per cent on a year-over-year basis in December 2013, up from a 4.11 per cent gain in November. Year-over-year price growth picked up among all property types tracked by the index with the exception of townhouse/row units where price growth was unchanged from November.
Year-over-year price gains were led by one-storey single family homes (+5.07 per cent). This was closely followed by two-storey single family homes (+4.93 per cent), townhouse/row units (+3.13 per cent) and apartment units (+2.87 per cent).
Year-over-year price growth in the MLS® HPI was mixed across housing markets tracked by the index, led by Calgary (+8.74 per cent) and Greater Toronto (+6.31 per cent). Greater Vancouver recorded a second consecutive year-over-year increase (+2.13 per cent) following more than a year of declines between late 2012 and late 2013.