Photo: Rachel Kramer/Flickr
May is typically a busy time for home buying, but last month proved to be particularly active according to numbers released Monday from the Canadian Real Estate Association (CREA). The amount of home sales rose 3.1 per cent above April to the highest level seen in more than five years.
Month-to-month, home sales were up in about 60 per cent of the metro markets, with the biggest increases seen in the GTA, Calgary, Edmonton, Ottawa and Montreal.
“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,” said CREA President Pauline Aunger in the release.
Another factor that pushed up May transactions? The seemingly unstoppable GTA housing market, which according to CREA economists, played a “starring role” in the monthly increase.
May 2015 also saw a 2.7 per cent sales increase and the tally for the month was 5.7 per cent above the 10 year average for the month.
Though transactions were up in May, inventory was down across the country. According to the association, there were 5.6 months of inventory at the end of May 2015, the lowest level in three years.
Tight supply and an increase in activity in the GTA helps explain the surge in home prices. In May, the actual national average price was $450,886, up 8.1 per cent from the same time last year.
However, if you exclude the GTA and the Greater Vancouver region from the equation, that number drops significantly. The average would be $344,988 and the price gain is a much more modest 2.4 per cent increase.
The MLS Home Price Index recorded a 5.17 per cent boost over May 2014. Vancouver and Toronto recorded the biggest annual gains across the country, with the index increasing by 9.41 per cent and 8.9 per cent respectively.
In Calgary, the price index inched up 1.21 per cent in May, the smallest gain in more than three years.