Canadian home sales reached their highest monthly level in November in six years, according to the Canadian Real Estate Association (CREA).
Seasonally adjusted sales activity tracked through MLS systems across the country last month climbed 1.8 per cent over October, while actual sales were up 10.9 per cent over November 2014. These increases fell largely on shoulders of top performing markets in British Columbia’s Lower Mainland and the Greater Toronto Area, said CREA.
The exuberance of these markets has also caused CREA to upwardly revise its annual sales forecast for 2015 to 504,000 units, which would be the second highest number of transactions in a single year ever recorded. The best year on record is 2007, when 521,804 residential units were sold through MLS systems across Canada.
Given the federal Liberals made public last week plans to increase the minimum down payment on homes sold for more than $500,000 starting February 15th, CREA expects sales in these two expensive markets to receive a shot in the arm heading into the New Year.
“Recently announced changes to mortgage regulations will likely boost sales activity in the short term, as buyers jump off the fence to beat the changes before they take effect next year,” said Pauline Aunger, CREA’s President, in a statement.
In November, CREA said there was a “fairly even split between the number of markets where sales posted a monthly increase and those where sales declined.” Year-over-year, the association’s MLS Home Price Index was up 7.11 per cent in November, the most significant increase in five-plus years.
British Columbia was home to the two markets that posted the greatest year-over-year price gains in November. Greater Vancouver came out on top with price gains of 17.83 per cent followed by the Fraser Valley, where prices were up 12.36 per cent. Greater Toronto placed third with prices up 10.29 per cent year-over-year.
Of all housing types CREA tracked, year-over-year price gains were most substantial for two-storey single family homes, as prices for these homes were up 8.88 per cent last month from November 2014. Over the same period one-storey single family home prices were up 6.42 per cent, townhouses and row unit prices rose 5.43 per cent and apartment unit prices climbed 5.22 per cent.
Along with national sales activity, the number of homes sellers put on the market last month was 3.1 per cent higher in November than in October. The Lower Mainland recorded the greatest increase in the number of new listings in November. Calgary, Edmonton, Kingston and Ottawa followed.
The national ratio of sales to new listings in November fell to 57.3 per cent from 58 percent the month before, reported CREA, noting anything in the 40-60 range “is generally consistent with balanced housing market conditions.”
However, a majority of local markets fell outside that healthy ratio range. Among these unbalanced markets, most posted ratios over 60 percent, which indicates a buyer’s market. Most of the tightest markets in the country were in British Columbia or Ontario.
The limited inventory in markets in Ontario and British Columbia is dragging down the national supply level, according to CREA. In November, national inventory was down to 5.4 months the lowest level in close to six years. This measure means if the current rate of sales persisted it would take 5.4 months for the current supply of homes to sell out.