CREA says June sales down 10.7% compared to a year ago
Mortgage Broker News
Earlier this week, the Canadian Real Estate Association (CREA) said that sales in June were up 4.1% compared with May, marking what the board described as the first “substantiative” month-over-month increase this year. However, the June sales were down 10.7% compared to a year ago, a 5-year low for the month.
“The national increase in June home sales suggests activity may indeed be starting to turn the corner,” CREA chief economist Gregory Klump said via email. “Even so, the number of homes trading hands has a long way to go before it returns to levels posted in recent years.”
More than 60% of all local housing markets in the country reported increased sales activity in June compared with May, but activity was below year-ago levels in about two thirds of Canadian regions, CREA noted. Those below year-ago levels were led by British Columbia’s Lower Mainland region, where sales showed signs of tempering and new listings were in decline.
The number of newly listed properties for sale fell by 1.8% across the country to 70,187 in June. Calgary, Edmonton, Ottawa, and Montreal were the most prominent markets to see listings take a hit.
CREA president Barb Sukkau suggested that the muted numbers might have stemmed from the stricter regulations introduced on January 1 for uninsured mortgages. She said that the regulations were “weighing on” buyers and sales, but that the extent to which it was affecting those searching for homes was varying based on market and prices.
The national average price for a home sold in June was just under $496,000, down 1.3% from a year ago. Excluding the Greater Vancouver and Greater Toronto markets, the average price was just over $389,000 – a 0.9% year-over-year decrease.
BMO Capital Markets senior economist Robert Kavcic wrote in a note to investors that Vancouver, and broadly B.C., are “the clear weak spots” because they’ve seen a 1.3% slump in sales in the wake of the recent foreign buyers’ tax and speculation fees on vacant homes.
He also categorized the Prairies as weak because Calgary, Edmonton, and Regina all saw sales and prices below year-ago levels in June, but said that higher oil prices could soon bring more confidence to buyers.
He had much more optimism for Toronto, which he said is stabilizing with sales jumping nearly 17% in June, the strongest seasonally-adjusted monthly increase in more than 14 years.
“Keep in mind, however, that activity is coming off low levels not seen since the last recession,” Kavcic said. “At any rate, that surge in demand has tightened up the market, even if overall conditions are still relatively soggy.”
Montreal and Ottawa remained the strongest markets in the country, bolstered by strong economies and few provincial measures aimed at cooling real estate.
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