Photo: Guilhem Vellut/Flickr
National real estate sales activity cooled down in September as home prices climbed, according to stats released this week by the Canadian Real Estate Association (CREA).
In September, both national existing Canadian home sales and the number of newly listed homes dipped 2.1 per cent from August.
“Sales are off the peak reached earlier this year but are still running strong, particularly in British Columbia and Ontario,” said Pauline Aunger, CREA’s president, in a statement.
The CREA report, which draws on MLS data for major market and national sales info, pointed out how much of an impact markets in those two provinces have on national numbers.
While the national average sales price was up 6.1 per cent year-over-over to $433,649, if Greater Vancouver and the Greater Toronto Area (GTA) are taken out of the equation, that number decreases to 2.9 per cent, or $334,705, according to the association.
Conversely, these two markets had a lot to do with the national decline in activity seen last month, noted Gregory Klump, CREA’s chief economist. “The GTA and Greater Vancouver made sizeable contributions to the monthly decline in national sales activity,” he said in a statement.
Home prices increased most steeply from September 2014 to last month in Greater Vancouver, with the index price there climbing 13.7 per cent during that period. The GTA followed with year-over-year price growth that hit 10.5 per cent in September.
Calgary’s September index price, on the other hand, remained unchanged from what it was the year before, and Saskatoon and Ottawa were nearly at parity with September 2014’s performance as well.
Year-over-year home prices dropped the most in Regina, where they were down 4.1 per cent.
While growth differed from market to market, on a national level all major housing types tracked through the MLS Home Price Index cost more this September than they did the last, with two-storey homes coming out on top. The price of this housing type was up 9.1 per cent year-over-year.
Bungalows trailed at 6.5 per cent 12-month price growth, while town and row home prices were up 4.4 per cent. Apartment prices increased 4.2 per cent.
Previously, TD Bank economists predicted that the stimulative effects of lower interest rates on the housing market would wane around this time. In a commentary released yesterday, the bank said the slower activity seen last month “underscores” that view.
The bank expects some buyers to start looking away from Toronto and Vancouver for more affordable housing options, such as condos. Because of this possible trend, TD said more attention should be paid to the MLS home quality adjusted price index, which is less vulnerable to the influence of high-end and low-end activity than average or median prices.
Overall, with the exception of energy-sector markets reeling from lower oil prices — Calgary, Edmonton, Regina, Saskatoon — the bank said “a favourable economic backdrop and balanced market conditions will continue to support a moderate pace of housing activity in most markets across Canada.”
However, in a separate report, Scotiabank said that the low key interest rate coupled with factors such as immigration should result in healthy sales activity for the rest of the season — but there is a caveat.
“There is a risk that increased economic uncertainty and market volatility could lead to a bigger pullback in hiring, consumer confidence and household spending,” the bank said in its commentary on the CREA report.