Existing home sales
activity remains strong in November
According to statistics released by The
Canadian Real Estate Association, existing home sales activity remained upbeat
in November 2009. The current strength of housing demand stands in sharp
contrast to weak activity recorded one year ago.
A total of 36,383 residential properties
traded hands via the Multiple Listing Service® (MLS®) of Canadian real estate
boards in November 2009. Up 73 per cent from year-ago levels, activity was down
just four tenths of a per cent from the highest level of activity for the month
posted in November 2007. Home sales set new records for the month of November
in Ontario and Quebec.
The unprecedented year-over-year gain in
activity underscores the extent to which demand has recovered from one year
ago, when news of the global financial crisis hammered consumer confidence.
Year-over-year gains were biggest in British Columbia (165 per cent) and
Ontario (77 per cent).
Since the beginning of 2009, some 437,507
homes have been sold through Canadian MLS® Systems. This is up five per cent
from activity in the first 11 months of 2008, but below levels for the period
in each of the previous three years.
The national residential average price was
$337,231 in November, a gain of 19 per cent compared
to one year ago. For the year-to-date, the average price is up 4.4 per cent
compared to the same period last year. The year-over-year increase in November
continues to reflect the high degree to which the average was skewed downward
last year by plummeting activity in Canada’s priciest markets, and then upward
by rebounding activity. Average price in November edged back from the peak
reached in October.
The price trend is
similar but less dramatic for the national MLS® weighted average price, which
compensates for changes in provincial sales activity by taking into account
provincial proportions of privately owned housing stock. The weighted average
price climbed 13 per cent on a year-over-year basis in November. This is a
smaller increase compared to the year-over-year gain of 14 per cent recorded
the previous month.
The residential average price in Canada’s
major markets was up 20 per cent year-over-year to $368,665. As with the
national counterpart, the price trend is similar but less dramatic for the
major market weighted average price which rose 11 per cent from last November.
The return of strong
demand and headline average price gains is beginning to draw more sellers back
to the market. Seasonally adjusted new listings coming onto Boards’ MLS®
Systems across Canada rose five per cent on a month-over-month basis in
November to 69,110 units. This is the biggest monthly increase since January
2008.
Despite the uptick in
new listings, the sharp rise in resale housing demand continues to draw down
inventories. There were 183,710 homes listed for sale on Boards’ MLS® Systems
in Canada at the end of November 2009. This is down 23 per cent from levels
reported one year ago, and the seventh month in a row in which inventories have
declined from year-ago levels.
Nationally, there were
four months of inventory in November 2009 on a seasonally adjusted basis, the
lowest level in more than two years. The actual (not seasonally adjusted)
number of months of inventory in November 2009 stood at five months, up
slightly from the previous month (4.6 months). An increase is normal at this
time of year, since demand tends to ease relative to supply over autumn and
winter months. The number of months of inventory is the number of months it
would take to sell current inventories at the current rate of sales
activity.
“The latest batch of seasonally adjusted
statistics may reflect distortions in the seasonal adjustment procedure due to
an extraordinarily weak housing market one year ago,” said CREA Chief Economist
Gregory Klump. “Deteriorating housing
affordability will reign in sales activity as the overall economy further
improves and the pool of buyers who qualify for financing shrinks.”