If you’ve been following recent reports of a sale surge in Toronto, Calgary’s record-breaking spring, and Vancouver’s double-digit gains, the latest market report from the Canadian Real Estate Association (CREA) won’t be too much of a shocker. National home sales rose 5.9 per cent between April and May 2014, the largest month-over-month increase in almost four years.
The largest sales increases were recorded in Calgary, Greater Toronto and Montreal.
“The monthly increase in May activity was widespread among local housing markets, with some 80 per cent of them reporting stronger sales compared to April,” said CREA President Beth Crosbie, in the news release. “Over the past 25 years, that widespread a monthly sales increase has been recorded only a handful of times. Even so, the improvement varied by location.”
Year-over-year, actual sales also saw a spike, rising 4.8 per cent above May 2013 and 3.8 per cent above the 10-year average for the month.
Growth in home prices saw no signs of slowing down, though big cities definitely pulled up the national average. The average price for a Canadian home sold in May 2014 was $416,584, up 7.1 per cent from May 2013. But if you take out pricey markets such as Greater Vancouver and the GTA, the average price is $336,373, a 5.3 per cent increase from last year.
On a local level, Calgary saw the biggest price gains with the MLS Home Price Index rising 10.12 per cent from last year. It was followed by the GTA at 7.08 per cent and Greater Vancouver at 4.27 per cent.
The low-rise market continues to lead price growth with two-storey family homes rising in price by 5.98 per cent year over-year, and one-storey homes following on their heels with a 5.19 per cent bump. Townhouse and row units saw similar growth with a 5.04 per cent price increase while apartment units saw less dramatic growth with the price index growing by 2.93 per cent.
On the supply side, the number of newly listed homes rose 3.8 per cent in May, the fourth straight monthly gain. New listings were also up in about 80 per cent of local markets.
“In markets where supply had become tight, we expected sales to improve in tandem with listings,” said Gregory Klump, CREA’s Chief Economist. “Had it not been for such a brutal winter that delayed the launch of the spring market, the improvement in new listings and sales would likely have been more spread out over the past few months.”
For more details check out the charts below:
Looking at the first quarter of 2014, CREA also noted that sluggish sales and listings in the first part of the year, followed by an exceptionally active spring market was largely the symptom of a particularly harsh winter. Altogether, the combined sales from March to May mostly hit the expected, average levels.
But the agency cautioned against thinking the remarkable growth in recent months would have staying power, suggesting in the news release that “these [sales] deferrals are now likely to have been largely depleted, which suggests that the strength of sales momentum heading into the summer may be transient.”
It’s predicting sales activity to remain in line with its 10-year average and to come in at around 450,000 units for the seventh consecutive year.
Here’s what CREA is predicting province-to-province for year-long sales:
- British Columbia is expected to lead the provinces in largest year-over-year increase in activity with an 8.3 per cent boost in sales.
- Alberta’s annual sales are projected to rise by 3.8 per cent in 2014 while Saskatchewan, Manitoba, and Ontario should stay at 2013 levels.
- Quebec is expected to see a 1.7 per cent sales drop, followed by 4.2 per cent decline in New Brunswick, a 5.1 per cent decrease in Nova Scotia, and a 2.6 per cent slip in Newfoundland and Labrador.