Spring fever: Record home sales, prices across country
Home sales across the country hit a record high last month, boosted by transactions in the hot market of Toronto, further fuelling concerns about that city’s real estate sector.
The Canadian Real Estate Association said Tuesday home sales through its Multiple Listings Service rose 1.1 per cent in March to top the previous monthly record set in April 2016. On a seasonally adjusted basis, sales totalled 46,353, up from 45,856 in February.
Greater Victoria had a strong housing market in March, but sales numbers did not hit a record. Buyers in the capital region have been hampered by a lack of homes to choose from. At the end of last month, there were 1,556 listings, down by 40.6 per cent from 2,618 in March 2016.
Even so, a total of 929 properties changed hands in Greater Victoria last month, said the Victoria Real Estate Board. That’s a drop from 1,121 sold in March last year.
Nationally, the number of newly listed homes climbed by 2.5 per cent from February to March, the Canadian board said.
Greater Victoria’s benchmark price increases year-over-year were in the 20 per cent range in the capital region and elsewhere on Vancouver Island. The price of a benchmark single-family house in the core of Greater Victoria was $790,100 in March, up from $663,300 a year earlier.
Greater Vancouver prices went up by 12.7 per cent and Fraser Valley home prices climbed by 19.4 per cent.
The MLS home-price index increased by 18.6 per cent yearover-year on a national basis.
Bank of Montreal chief economist Doug Porter said where you stand on the issue of Canada’s housing market depends on where you live.
“Almost the entire province of Ontario’s housing market is now on fire, while most of the rest of the country wonders what all the fuss is about,” Porter wrote in a research note.
Policy-makers, think tanks and the Bank of Canada have issued repeated warnings that while concerns of an overheated housing market may be confined to the Toronto area, a correction could have repercussions for the national economy given the sheer scale of the city’s real estate industry.
Three levels of government facing a red-hot housing market in the Toronto Area agreed Tuesday not to introduce any measures that would further boost demand and drive prices even higher.
The federal and Ontario finance ministers and the mayor of Toronto met in the city to discuss how to tackle the housing market in the region, where the average price of detached houses rose to $1.21 million last month, up 33.4 per cent from a year ago.
Ontario Finance Minister Charles Sousa signalled that he will unveil his housing plan before the provincial budget, set to be delivered on April 27.
“In the coming week, the Ontario government will announce a suite of measures designed to increase supply and address demand,” he said. “We’ve developed a comprehensive action plan to help stabilize the housing market.”
Federal Finance Minister Bill Morneau said the three agreed that in the short term, none of the levels of government will bring in new measure for homebuyers that would boost demand.
“We’re concerned that the price increases, in particular in the GTA, are putting the dream of owning a home out of reach of middle-class families,” he said. “At the same time, we know that those who own their homes are concerned that they maintain the value of those homes.”
The actual national average price for homes sold in March this year was $548,517, up 8.2 per cent from a year ago. Excluding Vancouver and Toronto, the average price was $389,726.
Compared with a year ago, actual sales in Canada, not seasonally adjusted, were up 6.6 per cent. Gains in the Greater Toronto Area led the way with a 17.0 per cent increase.
CIBC deputy chief economist Benjamin Tal said it looks like the Vancouver market has hit bottom and started to recover.
Sales in Vancouver cooled last year in the wake of a tax on foreign buyers. Tal said the drop was due to domestic buyers waiting to see what the impact of the tax would be, but they are now back in the market.
“I think Vancouver will see a very strong spring,” he said.
A Royal LePage report agrees, saying it looks like the recent correction in Vancouver may be short-lived. In the past month, sales in Vancouver have jumped forward by nearly 50 per cent on a month-over-month basis, says Royal LePage CEO Phil Soper.
“An unfortunate side effect of heavy-handed regulatory intervention is that we risk market whiplash,” Soper said
CREA said the number of newly listed homes nationally increased 2.5 per cent in March, led by gains in the Toronto region, Calgary, Edmonton and B.C.’s Lower Mainland.
The national sales-to-new listings ratio was 67.4 per cent in March compared with 68.3 per cent in February. There were 4.1 months of inventory on a national basis at the end of March 2017, down from 4.2 months the month before.