Home sales edged higher in Canada in October, reveal new statistics from the CREA.
The Canadial Real Estate Association's latest report shows that national home sales increased slightly in October, rising 0.7 per cent from September. This marks the sixth consecutive month of rising resale activity and the strongest activity for the month of October since 2009 - a significant turnaround compared to the quiet start to the year.
Demand has helped to drive prices up, with the MLS Home Price Index (HPI) up 5.5 per cent year-over-year in October and the national average sale price up 7.1 per cent
October sales were up from year-ago levels in about 70 per cent of all local markets, led by Greater Vancouver and the Fraser Valley, Victoria, Calgary, and Greater Toronto. While Toronto, Calgary and Vancounver traditionally lead demand, the CREA notes that the rise - despite being being "far from a Canada-wide phenomenon", extends beyond three key cities. Indeed, combined sales in these five markets account for almost 40 per cent of national sales activity.
The strength in sales is attributed to a range of factors, including low interest rates, which have helped to offset rising prices in the country's nmore expensive markets. Immigration has also driven activity, explains Gregory Klump, CREAâs Chief Economist: "Sales in a number of B.C. markets have started to recover from weaker demand over the past couple of years. They have also been improving across much of Alberta, where interprovincial migration and international immigration are reaching new heights."
âEven so, sales did not increase in many local markets in Canada," adds CREA President Beth Crosbie, "which shows that national and local housing market trends can be very different."
The market overall is becoming increasingly balanced, though, with the number of newly listed homes rising 0.8 per cent in October month-on-month to meet demand. Indeed, the national sales-to-new listings ratio was 55.7 per cent in October (between 40 and 60 per cent is usually consistent with a balanced housing market). This is the third month in a row where sales and new listings have moved in tandem.
About 70 per cent of the remaining markets posted ratios above this range, almost all of which are located in British Columbia, Alberta and Southern Ontario.
Price growth varied among housing markets tracked by the index. As in recent months, Calgary (up 9.47 per cent), Greater Toronto (8.30 per cent), and Greater Vancouver (6.03 per cent) continued to post the biggest gains.
Prices were up between one and 2.5 per cent on a year-over-year basis in the Fraser Valley, Victoria, and Vancouver Island, flat in Saskatoon, Ottawa, Greater Montreal, and Greater Moncton, and down 3.4 per cent in Regina.
The MLS Home Price Index (MLSÂ® HPI) provides a better gauge of price trends than is possible using averages because it is not affected by changes in the mix of sales activity the way that average price is.
The actual (not seasonally adjusted) national average price for homes sold in October 2014 was $419,699, up 7.1 per cent from the same month last year.
"The national average price continues to be pulled upward by sales activity in Greater Vancouver and Greater Toronto, which are among Canadaâs most active and expensive housing markets," explains the CREA. "Excluding these two markets from the calculation, the average price is a relatively more modest $330,596 and the year-over-year increase shrinks to 5.4 per cent."
Photo: Phil Grondin