New data from The Canadian Real Estate Association shows that residential property sales in the country were down by 3.1 percent in January 2015 on a month-over-month basis, and were also 2 percent lower than they were in the previous January.
Home prices were the number one headwind slowing down home sales in the United States, and things were not much different “up north,” as the CREA’s monthly home index shows prices 3.1 percent higher on a year-over-year basis as of January. Price gains were especially egregious in Calgary (7.76 percent) and Greater Toronto (7.47 percent), and Greater Vancouver (5.53 percent), though still far removed from the double-digit price appreciation that was a key trend in the housing market last year.
All in all, January sales had decreased month-over-month in 60 percent of local housing markets, with reduced sales in Alberta and Saskatchewan being the biggest factors in January’s sales slump. For one-story single family homes, year-over-year price growth was steady for the month of January, though the good thing was that price growth had decelerated for other types of residential property covered by the CREA on its monthly report.
According to CREA President Elizabeth Crosbie, consumer confidence in the Prairie regions was down “as expected,” and had forced several potential home buyers to sit the fence. “By contrast, housing market trends in the Maritimes are continuing to improve,” she added. Housing activity in January 2015 was 2 percent lower year-over-year, without seasonality taken into account; this was the first annual decline reported since April 2014.
“Comparing sales activity for January this year to sales one year earlier, there was a fairly even split between the number of markets where sales were up versus the number of markets where sales were down,” observed CREA chief economist Gregory Klump. “The decline in national sales largely reflects weakened activity in Calgary and Edmonton. If these two markets are removed from national totals, combined sales activity remained 1.9% above year ago levels.”
Newly listed homes, according to the CREA’s data, moved up by 0.7 percent in January as compared to the month prior. The supply of newly listed homes was up in about 50 percent of local markets, with the biggest increases recorded in Edmonton and Greater Toronto. In terms of declines in supply, Greater Vancouver, Calgary, and Regina posted the biggest decreases. National sales to new listings ratio was at 49.7 percent, which made this the first time the metric had gone below 50 percent since December 2012; nonetheless, readings of 40 percent to 60 percent signify a housing market that has equilibrium between buyers and sellers.
Aside from sales to new listings ratio, months of inventory is also considered an important statistic when trying to determine whether there is a balance of supply and demand. For January 2015, Canada’s housing market had 6.5 months of inventory, marking the highest reading on CREA’s records since April 2013. Likewise, this figure also suggests that Canada’s housing market can still be considered a balanced one.