Canada’s March home sales hit record high

OTTAWA — Home sales across the country hit a record high last month, propped up by transactions in the fiercely hot market of Toronto, further fuelling concerns about the city’s real estate sector.

The Canadian Real Estate Association said Tuesday home sales over its Multiple Listings Service system increased by 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.

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.

The latest sales data was released ahead of a meeting between Mayor John Tory and the federal and Ontario finance ministers to discuss soaring home prices in the Greater Toronto Area, which have leapt by more than 30 per cent in the last year.

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 Greater Vancouver and Greater 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 per cent increase.

But it wasn’t just Toronto posting whopping hikes.

Sales in the Ontario cities of London and St. Thomas increased 44.4 per cent compared with March 2016, while in the Niagara region they grew by 30 per cent. Ottawa climbed 28.6 per cent.

Sales in Greater Vancouver, once the country’s hottest real estate market, fell 31.5 per cent compared with a year ago. But the region was up 4.1 per cent on a month-over-month basis.

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.

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.

Meanwhile, Royal LePage released a report Tuesday that suggests the recent correction in Vancouver’s housing market may be short-lived.

In the Greater Vancouver area, the aggregate price of a home rose 12.3 per cent yearover-year to $1,179,482 in the first three months of the year, it said.

Royal LePage CEO Phil Soper said the housing correction in Vancouver began seven months ago, around the time that the B.C. government introduced a 15 per cent tax on foreign nationals buying real estate in the city.

Sales volumes then plunged and prices slowed their torrid upwards trajectory.

But just in the past month, sales in the Vancouver area have leapt forward by close to 50 per cent on a month-over-month basis, says Soper — better than the seasonal average.

“An unfortunate side effect of heavy-handed regulatory intervention is that we risk market whiplash,” Soper said.

Across Canada, the aggregate price of a home grew 12.6 per cent year-over-year to $574,575 during the first quarter, Royal LePage said.

In Waterloo Region, the aggregate price increased 14.4 per cent to $400,902. Royal LePage said the median price of a two-storey home increased 14.9 per cent to $423,258 while the median price of a bungalow rose 12.8 per cent to $365,625. Condo prices increased 11.5 per cent to $255,724.

The price of a home in the Greater Toronto Area rose by an “unprecedented” 20 per cent across all housing types to $759,241 in the first three months of 2017.