National home sales activity and average prices in Canada were little changed in October, according to the latest statistics from the Canadian Real Estate Association (CREA).
The number of home sales processed through the MLS Systems of Canadian real estate Boards and Associations was down 0.1% compared to the previous month and remains below levels reported in the first half of the year.
Sales activity improved in about half of all local markets as compared to September, including Greater Vancouver and Greater Toronto. However, in keeping with the national trend, transactions there remain well below levels posted in the first half of the year.
On a year on year basis, actual activity was also little changed, down 0.8% from levels recorded for October of last year. Led by Calgary, sales were up compared to levels a year ago in almost two thirds of all local markets. Sales remained below year ago levels in Greater Toronto, Greater Vancouver, and Greater Montreal.
‘Sales data in October held steady at the national level, but we are seeing some diverging trends among local housing markets. Markets in Alberta and Saskatchewan are gaining strength, while some of Canada’s traditionally most active markets have lost steam,’ said CREA ‘resident Wayne Moen.
Little has changed since national activity geared down in the wake of mortgage rules that came into force in July, according to Gregory Klump, CREA’s chief economist.
‘Opinions differ about how sharply sales have slowed depending on the local housing market,’ he said.
He pointed out that national sales in October were on par with the same month last year and in line with the 10 year average for the month and activity for the year to date is also running in line with the 10 year average.
‘These results suggest that the Canadian housing market overall has returned to a more sustainable pace,’ added Klump.
A total of 402,322 homes have traded hands via Canadian MLS Systems over the first 10 months of 2012, up 0.8% from levels reported over the same period last year and 0.4% below the 10 year average for the period.
The number of newly listed homes fell by 3.8% in October following a jump in September. Monthly declines were reported in almost two thirds of all local markets, with Greater Toronto and Greater Vancouver exerting a large influence on the national trend.
The monthly decline in new listings caused the national sales to new listings ratio to edge back up to 50.9% in October compared to September’s reading of 49%. Based on a sales to new listings ratio of between 40 to 60%, nearly two-thirds of all local markets were in balanced market territory in October.
The number of months of inventory is another important measure of the balance between housing supply and demand. It represents the number of months it would take to sell current inventories at the current rate of sales activity. It was another measure that was little changed in October. Nationally, there were 6.5 months of inventory at the end of October. This is virtually unchanged from the reading of 6.4 months at the end of September.
The actual (not seasonally adjusted) national average price for homes sold in October 2012 was $361,516. This represents an increase of $80, or 0.02% compared to the national average price in October 2011.
The national average price continues to be influenced by compositional factors, most notably by fewer sales in Greater Vancouver this year compared to much stronger levels last year, and more recently by fewer sales in Greater Toronto.
Excluding these two markets from the national average price calculation yields a year on year saw an increase of 2.5%, reflecting average sale prices that rose in 70% of all local markets in October 2012.
Unlike average price, the MLS Home Price Index is not affected by changes in the mix of sales, so it provides the best gauge of Canadian home price trends.