OTTAWA, Sept. 17, 2012 /CNW/ - According to statistics released today by
The Canadian Real Estate Association (CREA), national resale housing
activity dropped sharply from July to August 2012.
Home sales down 5.8% from July to August.
Actual (not seasonally adjusted) activity stood 8.9% below levels in
Number of newly listed homes down 1.7% from July to August.
Housing market remains firmly in balanced territory at the national
National average home price up 0.3% on a year-over-year basis in August.
The Composite Aggregate Benchmark home price was up 4% in August, its
smallest gain in over a year.
The number of home sales processed through the MLS® Systems of real
estate Boards and Associations in Canada fell 5.8 per cent between July
and August 2012, marking the largest month-over-month decline since
Declines were reported in about two-thirds of all local markets
representing 80 per cent of national activity, with monthly sales
declines in almost all large urban centres, including Greater Toronto,
Greater Montreal, Greater Vancouver, the Fraser Valley, Calgary,
Edmonton, and Ottawa.
Actual (not seasonally adjusted) activity was down 8.9 per cent in
August 2012 compared to the same month last year. This was the biggest
year-over-year drop since April 2011.
"While we always caution that housing market trends at the national
level can and do run counter to trends in many local markets, the
decline in activity in August was definitely the result of much of the
country moving in the same direction," said CREA President Wayne Moen.
"That said, many smaller and more affordable markets bucked the
national trend. As always, all real estate is local, so buyers and
sellers should speak to their REALTOR® to understand how the housing
market is shaping up where they live."
"August's sales figures will no doubt provide comfort to policymakers,
providing the first clear indication that the recent changes to
mortgage regulations aimed at cooling the market are working as
intended," said Gregory Klump, CREA's Chief Economist. "With previous
changes to mortgage regulations, demand rose between the time changes
were announced and their implementation, and invariably fell in the
months immediately after being implemented, before recovering to
long-term levels. By contrast, recent changes to mortgage regulations
were in force more quickly after being announced, so home buyers had
far less time to react. As a result, demand didn't pick up just before
the changes took effect, while sales declined once they did."
A total of 334,208 homes have traded hands over Canadian MLS® Systems so
far this year. This represents a 2.8 per cent increase compared to
levels reported over the first eight months of 2011, and a narrowing of
the 4.5 per cent lead for year-to-date sales activity in July.
The number of newly listed homes fell 1.7 per cent in August compared to
July. New supply was down in just over half of all local markets in
August, but the 7.7 per cent month-over-month decrease in Greater
Toronto by far contributed most to the national decline.
With the decline in sales activity outstripping the decrease in new
listings, the national housing market was more balanced in August than
it had been at any other point in the past two years.
The national sales-to-new listings ratio, a measure of market balance,
stood at 51 per cent in August 2012, down from 53.1 per cent in July.
Based on a sales-to-new listings ratio of between 40 to 60 per cent,
about two-thirds of all local markets were in balanced market territory
Another measure of market balance, the national number of months of
inventory, stood at 6.5 months at the end of August. This was up from
6.1 months at the end of July, as the measure rose in between July and
August in almost two-thirds of all local markets. The number of months
of inventory represents the number of months it would take to sell
current inventories at the current rate of sales activity, and is a
further measure of the balance between housing supply and demand.
"The broadly based decline in August sales activity suggests that some
buyers may no longer qualify for a mortgage now that amortization
periods for high ratio mortgages have been shortened," said Klump. "As
the lynchpin of the housing market, lower first-time buying activity
will have downstream effects over the rest of the market. While we
expect it will likely take more time for move-up buyers to sell their
current home, a few more months of data are needed to gauge the broader
impact of recent regulatory changes on Canada's housing market."
The actual (not seasonally adjusted) national average price for homes
sold in August 2012 was $350,192, up three-tenths of one per cent from
the same month last year.
The national average price continues to be influenced by compositional
factors, most notably by fewer sales in Vancouver this year compared to
much stronger levels last year. The result has been a downwardly skewed
national average price this year compared to an upwardly skewed average
selling price last year.
By way of example, excluding just Greater Vancouver from the national
average price calculation yields a year-over-year increase of 3.3 per
cent, reflecting the fact that average sale prices were actually up
year-on-year in three-quarters of all local markets in August.
Unlike average price, the MLS® Home Price Index (MLS® HPI) is not
affected by changes in the mix of sales, providing the best gauge of
Canadian home price trends. The index tracks home price trends in five
of Canada's most active housing markets, including Greater Vancouver,
the Fraser Valley, Calgary, Greater Toronto, and Montreal. These five
markets comprise approximately 45 per cent of all home sales activity
The MLS® HPI rose four per cent on a year-over-year basis in August
2012. This was the fourth time in as many months that the
year-over-year gain shrank, and marks the slowest rate of increase in
over a year.
Year-over-year price growth held steady at 5.6 per cent in August for
one-storey single family homes while moderating to 5.2 per cent in the
two-storey single family Benchmark housing category.
Prices for townhouse and apartment units continue to see more modest
gains, rising 1.7 per cent and 1.8 per cent respectively on a
year-over-year basis in August 2012. These were also smaller gains than
were seen in July.
The MLS® HPI posted the largest year-over-year increase in Calgary
(6.5%), followed by Greater Toronto (6.3%), the Fraser Valley (2.5%),
and Montreal (2.2%). In Greater Vancouver, the MLS® HPI posted its
first albeit marginal year-over-year decline (-0.5%) in almost three
PLEASE NOTE: The information contained in this news release combines
both major market and national MLS® sales information from the previous
CREA cautions that average price information can be useful in
establishing trends over time, but does not indicate actual prices in
centres comprised of widely divergent neighborhoods or account for
price differential between geographic areas. Statistical information
contained in this report includes all housing types.
MLS® is a co-operative marketing system used only by Canada's real
estate Boards to ensure maximum exposure of properties listed for sale.
The Canadian Real Estate Association (CREA) is one of Canada's largest
single-industry trade associations, representing more than 105,000
REALTORS® working through more than 100 real estate Boards and
Further information can be found at http://crea.ca/statistics.
SOURCE: Canadian Real Estate Association
For further information:
Pierre Leduc, Media Relations
The Canadian Real Estate Association
Tel.: 613-237-7111 or 613-884-1460