In January 2016, the number of home sales recorded through the MLS Systems across the country increased 0.5 per cent month-over-month, causing national sales activity to rise to its highest level since late 2009, according to the Canadian Real Estate Association (CREA).
“Single family home buyers in the GTA and Lower Mainland of British Columbia had been expected to bring forward their purchase decisions before tightened mortgage regulations take effect in February 2016,” said Pauline Aunger, CREA president, in a press release. “If listings in these and nearby markets were not in such short supply, January sales activity would likely have reached even greater heights. Meanwhile, other major urban housing markets have an ample supply of listings, particularly where some home buyers have become increasingly cautious amid an uncertain job market outlook.”
“January 2016 picked up where 2015 left off, with single family homes in the GTA and Greater Vancouver in short supply amid strong demand standing in contrast to sidelined home buyers and ample supply in a number of Alberta housing markets,” said Gregory Klump, CREA Chief Economist. “Tighter mortgage regulations that take effect in February may shrink the pool of prospective home buyers who qualify for mortgage financing and cause national sales activity to ease in the months ahead.”
Actual (not seasonally adjusted) sales activity increased eight per cent year-over-year in January 2016, which is 2.6 per cent higher than the 10-year average for the month. About two thirds of all local markets experienced increased sales activity.
The number of new homes on the market dropped by 4.9 per cent month-over-month, causing the gains experienced at the end of 2015 to reverse. This drop was largely driven by declines in Canada’s largest urban housing markets.
The national sales-to-new listings ratio grew to 59.2 per cent in January due to the drop in the new supply of listings, indicating a balanced market. January’s figure is the ratio’s highest since November 2009.
The MLS Home Price Index (HPI) increased by 7.73 per cent year-over-year in January 2016, which is the largest gain in over five years. In two-storey single family homes, prices increased by 9.97 per cent, while single-storey single family homes posted a gain of 6.86 per cent. Townhouses/row units saw price increases of 6.46 per cent, while the price of apartment units increased by 5.16 per cent.
The actual (not seasonally adjusted) national average price for a home in January 2016 increased 17 per cent year-over-year to $470,297, when including British Columbia and Ontario. When the Greater Toronto and Greater Vancouver markets are not included, the average sales price increased by eight per cent to $338,392.