Canadian home sales continued to climb in May for the fourth month in a row.
The Canadian Real Estate Boards and Association reports that sales rose 3.1 per cent last month from the previous 30 days.
May sales were up from the previous month in about 60 per cent of all local markets, led by increases in the Greater Toronto Area, Calgary, Edmonton, Ottawa and Montreal. Now, national activity is at its highest level in more than five years.
“CMHC announced in April that effective June 1 it was hiking mortgage default insurance premiums for homebuyers with less than a 10 per cent down payment, so some buyers may have jumped off the fence and purchased in May to beat the increase,” says CREA President Pauline Aunger.
“It’s one of the factors that could have affected sales last month. That said, all real estate is local, with trends that reflect a combination of local and national factors.”
Sales in and around the Greater Toronto area continue to dominate activity, but sales has also rebounded in Calgary and Edmonton.
“The heightened uncertainty among some home buyers in these housing markets may be easing,” comments CREA Chief Economist Gregory Klump.
The number of newly listed homes was virtually unchanged (down 0.2 per cent) in May compared to April. This reflects an even split between housing markets where new listings rose and where they fell, with little monthly change for new listings in most of Canada’s largest and most active urban markets.
The national sales-to-new listings ratio was 57.6 per cent in May, up from a low of 50.4 per cent in January, when it reached its most balanced point since March 2013. The ratio has risen steadily along with sales so far this year, as new supply has remained little changed.
A sales-to-new listings ratio between 40 and 60 per cent is generally consistent with balanced housing market conditions, with readings above and below this range indicating sellers’ and buyers’ markets respectively. The ratio was within this range in about half of local housing markets in May. About a third of local markets were above the 60 per cent threshold in May, comprised mostly of markets in and around the Greater Toronto Area and markets in British Columbia.
Year-over-year price growth varied among housing markets, with Greater Vancouver and Toronto leading the way with growth of 9.41 per cent and 8.9 per cent respectively. By comparison, Fraser Valley, Victoria, and Vancouver Island prices all recorded year-over-year gains of about four per cent in May.
Price gains in Calgary continued to slow, with a year-over-year increase of just 1.21 per cent in May. This was the smallest gain in more than three years and the 11th consecutive monthly slowdown in year-over-year price growth.
Elsewhere, prices held steady on a year-over-year basis in Saskatoon and Ottawa, rose slightly in Greater Montreal and fell by about 3 per cent in Regina and Greater Moncton.