Residential property sales in Canada increased in June over the previous month and the sector has now seen a big year on year gain, according to the latest statistics from the Canadian Real Estate Association (CREA).
Its report says that year to date sales remain in line with the ten year average and the national real estate market remains firmly entrenched in balanced territory. It also reports that the number of newly listed homes also rose from May to June.
However, national average price are still being skewed upward by the value of sales in expensive Vancouver neighbourhoods, with price gains in other markets providing additional loft.
Seasonally adjusted national home sales activity rose 2.6% in June 2011 compared to the previous month. Two thirds of local markets posted month on month gains in June.
Activity remained stable in Toronto while declining slightly in Vancouver and the Fraser Valley. Major markets that saw gains compared to May included Calgary, Montreal, Ottawa, London, Hamilton, and Victoria.
The national average price for homes sold in June 2011 was $372,700, up 8.7% from the same month last year. The national average price is becoming less affected by the overall number of sales in some expensive Vancouver neighbourhoods, but is still being pitched higher by the value of those sales, CREA said.
Activity in these neighbourhoods has eased from levels reported in February and March, while sales elsewhere across Canada have risen in line with normal seasonal trends. As a result, property sales above $1 million in Vancouver West, West Vancouver, and Richmond now account for a smaller but still elevated share of national activity.
While the effect of Vancouver activity on the national average price has begun to wane, broadly based price gains in other housing markets are holding the national average price aloft. Close to 80% of local markets posted year on year average price gains in June. This includes Toronto, where price gains reflect a tight balance between supply and demand.
‘Canadian housing demand remains resilient, thanks to low interest rates, job growth, and home buyer confidence in the economy,’ said Gary Morse, CREA’s president.
Actual, not seasonally adjusted, activity came in 10.8% above June 2010 levels, but this largely reflects falling sales activity last June, said CREA. This was also the case for the year on year increase in activity in May. Year on year comparisons in July may also be stretched by falling activity one year ago, since July 2010 marked the low point for activity last year.
‘The Canadian housing sector remains on a solid footing. The rise in monthly home sales activity at the end of the second quarter, upbeat business sentiment and hiring intentions, and signs that the Bank of Canada is in no rush to raise interest rates bode well for home sales activity and prices going into the second half of 2011,’ said Gregory Klump, CREA’s chief economist.
National sales activity was down 4.7% in the second quarter compared to levels in the first quarter. CREA said this in part reflects how new mortgage rules announced in January and implemented at the end of March pulled sales forward into the first quarter at the expense of sales activity in April and May. Mortgage interest rates also rose in April and May, which may have moved some home buyers to the sidelines.
The number of newly listed homes also rose nationally by 1.8% from May to June. Gains in Toronto, Vancouver, and Ottawa contributed most to the national increase. The rise in new listings will be especially welcome news for home buyers in Toronto, where listings have been in short supply relative to demand this year, CREA said.
About 60% of local housing markets in Canada were balanced in June. Almost half of the remainder can be classified as sellers’ markets, based on a sales to new listings ratio above 60%.
The seasonally adjusted number of months of inventory stood at six months at the end of June on a national basis, holding steady compared to May. 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.