PROPERTY PRICES ON THE RISE ACROSS CANADA – BUT SALES STILL AT FIVE YEAR LOW

Residential property sales in Canada have increased by 4.1% this month, but prices remain still well down on figures from the past five years.

According to the latest index, the first time that sales have increased month on month this year, but transactions are still significantly down. In addition to this, activity is down 10.7% from June 2017, according to the data from the Canadian Real Estate Association (CREA).

The figures also show that the national average price decreased by 1.3% year on year to $496,000. However, the national average price is heavily skewed by sales in the Greater Vancouver and GTA, two of Canada’s most active and expensive markets.

Excluding these two markets from calculations cuts almost $107,000 from the national average price, trimming it to just over $389,000.

More than 60% of all local housing markets reported increased sales activity in June compared to May, led by the Greater Toronto Area (GTA). By contrast, sales in British Columbia continued to moderate.

“This year’s new stress test on mortgage applicants has been weighing on homes sales activity; however, the increase in June suggests its impact may be starting to lift,” explains CREA president Barb Sukkau.

The index also shows that the number of newly listed homes fell by 1.8% in June, and also stood below levels for the month in recent years. New listings declined in a number of large urban markets, including those in British Columbia’s Lower Mainland, Calgary, Edmonton, Ottawa and Montreal.

But Gregory Klump, CREA chief economist, thinks that sales may be starting to turn the corner. “Even so, the number of homes trading hands has a long way to go before it returns to levels posted in recent years. Looking ahead, home sales activity and price gains will likely be held in check by higher interest rates,” he says.