Residential real estate activity remained stable through November 2019, according to the latest report from the Canadian Real Estate Association.
The monthly report based on MLS systems across the country found that activity increased 0.6% month-to-month, making November the ninth straight monthly gain, with 20% more sales than the six-year low hit in February 2019. On a year-over-year basis, sales increased 11.3%, led by strong activity in the Greater Toronto Area.
“Sales continue to improve in some regions and not so much in others,” said Jason Stephen, president of CREA, in a release. “The mortgage stress-test doesn’t help relieve the ongoing shortage of housing in markets where sales have improved, and it continues to hammer housing demand in markets with ample supply. All real estate is local, and nobody knows that better than a professional REALTOR®, your best source for information and guidance when negotiating the sale or purchase of a home.”
While sales stayed steady, new listings dropped 2.7%, approaching the lowest levels in the last decade. While sales picked up speed in the GTA, new listings fell off. Ontario as a whole is still struggling with limited supply and strong demand.
On a national level, there are 4.2 months of inventory as of the end of November, which is the lowest monthly level since the summer of 2007. The long-term average is 5.3 months. While the national market is still balanced, the CREA says we are approaching seller’s market territory. It’s important to remember that there are areas of Canada that are currently over-supplied, so there’s not a blanket solution for the housing supply issues in Canada.
The average price of a home in Canada in November 2019 was approximately $529,000, which is 8.4% higher than the same month a year ago. Without the two most expensive markets — the GTA and Greater Vancouver — the average price is closer to $404,000.
“Home prices look set to continue rising in housing markets where sales are recovering amid an ongoing shortage of supply,” said Gregory Klump, CREA’s Chief Economist. “By the same token, home prices will likely continue trending lower in places where there’s a significant overhang of supply, perpetuated in part by the B-20 mortgage stress-test that continues to sideline homebuyers there.”
With supply low and activity high, average price growth was strong for all types of housing. The average price of a two-storey single-family home increased 2.8%, followed by apartments rising 2.6%. One-storey single-family home prices climbed 2.5%, while townhomes increased 1.5%.
In Ontario, price growth “re-accelerated” above the rate of inflation in the Greater Golden Horseshoe. It’s no secret that lack of supply is what’s driving prices up. The economy has a positive outlook, immigration levels are high, and people want to live in the GTA.