Canadian home sales static

National home sales were little changed in November compared to October, finds the Canadian Real Estate Association (CREA).

In fact, the number of home sales processed edged down by one tenth of a percent.

CREA adds national sales activity in November stood 3.4% below the peak reached in September, which further proves that activity over the past few months was likely boosted by homebuyers who jumped into the market before their low-rate, pre-approved mortgages expired.

“Tightened mortgage regulations, combined with the recent increase in the five-year mortgage rate, have affected housing markets differently depending on their location,” says CREA President Laura Leyser.

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Local markets where sales improved on a month-over-month basis ran roughly even with the number in which activity edged back in November. There was a greater decline in Toronto, which offset expansion in Vancouver.

November’s seasonally adjusted sales figure was slightly higher (by 0.7%), but was roughly in line with the average for monthly sales over the past decade.

Actual (not seasonally adjusted) activity was up 5.9% over November 2012 levels. Year-over-year increases were posted in about half of all local markets, led by gains in Vancouver, Calgary, Edmonton, and Toronto.

On an actual (not seasonally adjusted) basis, a total of 434,678 homes have traded hands across the country so far this year. This represents an increase of 0.2% compared to levels recorded in the first 11 months of 2012.

“While there has been a lot of volatility in sales activity from month to month, sales for the year to date are on par with fairly steady levels posted for the same time period in each of the past five years,” said CREA chief economist Gregory Klump.

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The number of newly listed homes rose 1.8% on a month-over-month basis in November. New supply was up in a little over half of all local markets, with a jump in BC outstripping small declines in Toronto and Ottawa.

With sales activity flat on a month-over-month basis and new listings up, the national sales-to-new listings ratio slipped to 53.4% in November, compared to 54.5% in October. This remains well within balanced market territory, as has been the case since early 2010.

Based on sales-to-new listings ratio of between 40% and 60%, about three-out-of-five local markets were in balanced market territory in November.

The number of months of inventory is another important measure of balance between housing supply and demand; it represents the number of months it would take to completely liquidate current inventories at the current rate of sales activity.

There were six months of inventory at the national level at the end of November, unchanged from one month earlier. As with the sales-to-new listings ratio, the current level of the months of inventory measure indicates that the Canadian housing market remains well balanced.

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“Most housing markets are in balanced market territory, including in many large urban centers where sales are below peaks reached earlier this year,” says Klump. “On balance, current trends provide more evidence that the Canadian housing market remains well behaved while interest rates remain low.”

The actual (not seasonally adjusted) national average price for homes sold in November 2013 was $391,085, an increase of 9.8% from the same month last year.

The size of year-over-year average price gains continues to reflect the decline in sales activity last year in some of Canada’s larger and more expensive markets, which caused the national average price to drop at that time.

By removing Vancouver and Toronto from the national average price calculation, the year-over-year increase was reduced by more than half to 4.3%.