Housing markets expected to stay stable in months ahead, says CREA
Housing sales fell in Canada n May, down 3.1% compared with the previous month, according to the latest statistics from the Canadian Real Estate Association (CREA).
This was the first monthly decline since January, and CREA said activity ran only slightly above the five and ten year averages for the month of May.
‘Returning to an average level of sales activity still leaves Canada’s housing market in great shape. The expected continuation of low interest rates will keep housing markets stable and homeownership affordable and within reach for many buyers in the months ahead,’ said Wayne Moen, CREA president.
The actual (not seasonally adjusted) national average price for homes sold in May 2012 was $375,605, down 0.3% from the same month last year. While the national average price is more or less flat compared to last spring, average sale prices were up from year-ago levels in about seven of every ten local Canadian markets.
‘Activity in Greater Toronto is stronger this spring than it was last year, and higher priced homes are still selling quickly. As Canada’s most active housing market, and one of the priciest, it is still the biggest factor boosting the national average price but its support was less of a factor in May,’ said Gregory Klump, CREA chief economist.
‘At the same time, national average price is finding support from Calgary, where sales and average selling prices are up from levels in May last year. Overall, price growth remains modest amid balanced market conditions in much of the rest of Canada,’ he added.
Activity fell back in about 60% of all local markets in May as compared to April, led by the Greater Toronto Area, where sales nonetheless remained above levels recorded over most of last year.
Monthly sales declines elsewhere overshadowed improving activity in the Ottawa-Gatineau region as well as in Newfoundland and Labrador.
Actual (not seasonally adjusted) activity remained 9% above levels in May 2011, and also stood above the reading for May sales in the previous three years by a similar margin, reflecting volatile spring markets in each of the past four years.
For the third straight month, the number of newly listed homes was little changed in May, edging up just 0.3% from April. New listings either rose or held steady in 49 markets and new listings eased in 52.
CREA pointed out that moderating sales activity and a small uptick in new listings resulted in a more balanced national housing market in May. The national sales to new listings ratio, a measure of market balance, stood at 53.4% in May 2012, down from its April reading of 55.3%. Based on a sales to new listings ratio of between 40 to 60%, more than half of all local markets were in balanced market territory in May.
Nationally, the number of months of inventory stood at 5.9 months at the end of May, up from the April reading of 5.7 months. 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 a further measure of the balance between housing supply and demand.