Residential property sales in Canada fell 2.1% in February compared with the previous month and activity is 15.8% below a year ago, the latest data from the Canadian Real Estate Association (CREA) shows. The decline reversed the small gain recorded in January, leaving sales slightly below levels seen in recent months. National activity has generally held steady near current levels since it initially slowed down in August last year following tighter mortgage lending rules and guidelines.
Home sales picked up in just under half of all local markets from January to February. However, small declines in the very large markets of Greater Toronto and Montreal combined with larger declines in the large and medium sized markets of Greater Vancouver and Winnipeg tipped the balance nationally to the downside.
Prices have remained stable and the actual national average price for homes sold in February 2013 was $368,895, a 1% decline from the same month last year. There were fewer sales compared to year ago levels in relatively pricey Greater Vancouver, which continues to exert a strong gravitational pull on the national average sale price. Excluding Greater Vancouver which currently accounts for less than 6% of national activity, prices increased by 1.3% year on year. Calgary saw an 8% year on year price increase, Greater Toronto 3.2%, the Fraser Valley 0.4% and Greater Montreal 2.7%. However, prices fell by 3.3% in Greater Vancouver.
‘A rebound in sales in some of Canada’s largest and most expensive markets, similar to those we saw following previous mortgage rule changes, has so far remained elusive,’ said CREA president Wayne Moen. ‘That said, the slowdown in many big markets is being offset by activity in many smaller and more affordable markets that were less impacted by last year’s mortgage rule changes. This serves as a reminder that all real estate is local,’ he added.
The data also shows that almost 80% of local markets posted year on year declines in sales activity in February, the most notable exception being Edmonton. The year on year decline between this February and last year is largely a reflection of demand that is well off from 2012, according to Gregory Klump, CREA’s chief economist. ‘The cooling off of the housing market resulted from tighter mortgage rules and guidelines coming into force in mid-July last year, with most of the decline in the sales occurring in August. Since then, sales activity has been flying at a lower altitude but has not shown much in the way of further deterioration,’ he said.
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‘Until we get well into the summer months, year on year comparisons to months in the first half of 2012 are predictably going to be down significantly but not necessarily be indicative of further deterioration. Rather, year on year comparisons will continue to reflect the long shadow cast by higher sales prior to last summer’s policy tightening. Looking at the monthly trend since then shows that we’ve been seeing reasonably stable trends for demand and prices,’ he explained.
The number of newly listed homes in Canada fell 1.2% month on month in February, leaving them at their lowest level since November 2010. New listings were down in about 60% of local markets in February, with the largest declines reported in Greater Toronto, Montreal, Greater Vancouver, and Saskatoon.