Photo: Kama Guezalova/Flickr
Another month, another Canadian home sales record broken as transactions in April hit their highest level ever for the month.
Home sales recorded through multiple listing service (MLS) systems from coast to coast surged 10.3 per cent compared to April 2015, according to monthly numbers released today by the Canadian Real Estate Association (CREA).
“National home sales set new monthly records over the past two months, even as activity in Greater Vancouver and the GTA appears to have topped out,” says Cliff Iverson, the association’s president.
“With almost three-quarters of all local markets posting sales gains in April, there are plenty of other places where sales are climbing as we head into the busiest time of the year for homebuyers,” adds Iverson.
As home sales remained on a tear, prices also continued their upward trajectory. The aggregate benchmark price of a Canadian home was $539,400 in April, having surged 10.3 per cent in the past 12 months.
“A ‘Benchmark home’ is one whose attributes are typical of homes traded in the area where it is located,” explains CREA’s website.
Of the 11 markets the realtor association releases benchmark pricing for, only Calgary and Saskatoon posted year-over-year declines last month.
Calgary’s price slumped 3.5 per cent to $437,600, while Saskatoon’s took a 2.4 per cent hit, falling to $304,300.
For the country-leading Fraser Valley market, the benchmark price surged 25.6 per cent year-over-year to $560,700 in April, according to CREA.
Greater Vancouver was close behind as prices climbed 25.3 per cent to $844,800 over this period. Greater Toronto rounded out the top three as the benchmark reached $614,700, up 12.6 per cent from a year ago.
But for some homeowners, it’s not as simple as buy low, sell high.
While rapid price appreciation might encourage some to put their homes on the market in Toronto and Vancouver for a hefty profit, Gregory Klump, CREA’s chief economist, highlights a factor discouraging would-be sellers.
“The issue for many is that the decision to move means they would be looking to buy while competition for scarce listings is fierce,” he says in a statement.
“As a result, many homeowners are deciding to stay put and continue accumulating capital gains. That’s keeping listings off the markets at a time when they are already in short supply,” he adds.
The number of homes listed in April dropped 0.2 per cent from the month before.
Last month, the sales-to-new-listings ratio, which is sales divided by new listings, hit 64.5 per cent. The ratio hasn’t been this high since October 2009, says CREA.
If the ratio is between 40 and 60 per cent, CREA considers it a sign of a balanced housing market.
“Supply shortages and tight housing market conditions have become self-reinforcing in the GTA,” says Klump. “The Greater Vancouver Area appears to be heading in that direction, too.
In a response to CREA figures, Robert Kavcic, BMO’s senior economist, forecast what this means for the Canadian housing market moving forward.
“With supply in the two hot markets extremely tight, and policymakers barely testing the water, prices are likely to push even higher through the rest of this year,” he writes.