Seasonally adjusted national home sales activity in March came in one tenth of a percentage point above levels for the previous month, with stable demand in most large urban centres.
With national sales in each of the first three months of 2011 running close to their five- or ten-year monthly averages, seasonally adjusted national sales activity in the first quarter of 2011 was up 4.5 per cent from levels recorded in the fourth quarter of last year, and reached the highest quarterly level in a year.
Most of the quarterly increase in seasonally adjusted national sales activity was due to demand in Vancouver and Toronto. Recent changes to mortgage regulations may have caused a number of sales in some of Canada’s more expensive housing markets to be brought forward into the first quarter that would have otherwise occurred later in the year.
Sellers looking to tradeup before changes to mortgage regulations took effect made their move early, resulting in a significant rise in newly listed homes in January and February of this year. With changes to mortgage regulations looming in March, seasonally adjusted new residential listings for the month dropped five per cent month-to-month.
Steady sales activity combined with fewer new listings tightened the national resale housing market. The national sales-to-new listings ratio, a measure of the balance between supply and demand, stood at 56.5 per cent in March. This kept the national housing market firmly entrenched in balanced territory, with March marking the firmest reading for national market balance in more than a year.
Based on sales-to-new listings ratios, more than half of local markets in Canada could be considered balanced in March, with two-thirds of the remaining markets considered to be as sellers’ markets.
“The majority of local housing markets across Canada are well balanced, but not all of them are,” said Gary Morse, CREA’s President. “Within a province or local market, the balance between resale housing supply and demand can vary widely and evolve quickly, so buyers and sellers should speak with a local REALTOR® to understand housing market trends where they live.”
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 seasonally adjusted number of months of inventory stood at 5.6 months at the end of March on a national basis. This was unchanged from the previous month. Almost half of all local markets saw the number of months of inventory shrink compared to the previous month.
Throughout the first quarter of 2011, the national average price was skewed higher by strong activity in a few pricey areas of Greater Vancouver. March 2011 was no exception, with an increase of 8.9 per cent year-over year.
“A record number of multi-million dollar property sales in Richmond and Vancouver West are pushing up average prices for Greater Vancouver, British Columbia and nationally,” stated Gregory Klump, CREA’s Chief Economist. “If Vancouver is excluded from the equation, the national average price increase is cut by more than half to 4.3 per cent.”
“Looking ahead, evidence suggests that the potential rush of sales activity in March before recent changes to mortgage regulations took effect was a story that was largely focused in condo sales activity in Greater Vancouver. This confirms that the expected impact on sales activity of recent changes to mortgage regulations will likely be minor over the near term. Interest rates are now widely expected to remain on hold until at least mid-July, which is supportive for resale housing demand, market balance and prices,” Klump added.
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 neighborhoods 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.