The Canadian Real Estate Association (CREA) released its national housing market report for January 2018, announcing a three-year low in home sales through the MLS systems.
From December 2017 to January 2018, national home sales dropped 14.5%. On a year-over-year basis, this is only a 2.4% decline.
“The piling on of yet more mortgage rule changes that took effect starting New Year’s Day has created home-buyer uncertainty and confusion,” says CREA President Andrew Peck. “At the same time, the changes do nothing to address government concerns about home prices that stem from an ongoing supply shortage in major markets like Vancouver and Toronto. Unless these supply shortages are addressed, concerns will persist.”
He adds, “A professional REALTOR® is your best source for information and guidance in negotiations to purchase or sell a home during these changing times.”
With new listings plummeting 21.6% from December 2017 to January 2018, supply is once again an issue, right at a time when things were looking up for inventory levels. This is the lowest amount of new listings since 2009.
New supply fell 85%, led by a significant dip in the Greater Toronto Area (GTA). Kitchener–Waterlooand London and St. Thomas also had big supply drops.
All that said, Canada still has five months of inventory, which is on par with the long term average of 5.2 months.
“The decline in January sales provides clear evidence that the strength in activity late last year reflected a pull-forward of transactions, as rational homebuyers hurried to purchase before mortgage rules changed in 2018,” says Gregory Klump, CREA’s Chief Economist. “At the same time, a large decline in new listings prevented market balance from shifting in favour of homebuyers.”
While listings and sales fell, the average selling price increased, though price growth has slowed in major markets, especially in the Greater Golden Horseshoe (GGH). The national average selling price went up 2.3% year-over-year to just over $481,500.
As usual, Toronto and Vancouver had a strong impact on the national average home price. Remove them from the equation and the average is just $374,000.
In the GGH, price growth slowed but all housing types saw year-over-year increases. The average selling price for apartment units went up 20.1%; townhomes increased 12.3%, one-storey singles jumped 4.3%; and two-storey singles went up by 2.3%.
In the GTA, the home selling price averaged 5.2% higher than last year. In Guelph, prices increased by 10.9% and in Oakville–Milton, the average selling price actually fell by 1.2%.
Earlier this month, the Toronto Real Estate Board (TREB) reported a drop in GTA home sales but said to expect a rebound in the second half of the year. Since the GTA has such a strong influence on the national averages, we could see a similar rebound Canada-wide.