The Canadian Real Estate Association released its monthly home sales results for November 2018, as well as an updated resale housing forecast based on data up to the end of last month.
On a national level, the housing market continued to lose steam in November with sales dropping 2.3% from the previous month, which is also a 12.6% decline from the same period in 2017 and well below the 10-year average.
Sales activity dropped in the Greater Toronto Area, Greater Vancouver, and in Hamilton-Burlington. These drops offset the increase in sales in places like Edmonton.
“The decline in homeownership affordability caused by this year’s new mortgage stress test remains very much in evidence,” says Gregory Klump, CREA’s Chief Economist. “Despite supportive economic and demographic fundamentals, national home sales have begun trending lower. While national home sales were anticipated to recover in the wake of a large drop in activity earlier this year due to the introduction of the stress test, the rebound appears to have run its course.”
New listings also fell 3.3% from October to November, leaving 5.4 months of inventory nationally. This amount of supply is in line with the long-term trend, but Canadian markets differ so drastically across the country that this statistic doesn’t tell the whole story. For example, the Prairie provinces are currently oversupplied while Ontario is in need of more supply.
The national average sale price dropped 2.9% year-over-year down to just over $488,000. If you take the GTA and Vancouver out of the equation, the average price is down to just over $378,000.
Overall, apartment units had the greatest price gain in November 2018, jumping 6% year-over-year. Townhomes followed with a 4% increase, then one-storey single-family homes and two-storey single-family homes increased 0.4% and 0.1%, respectively.
In the Greater Golden Horseshoe, most regions experienced price growth except Barrie and District where the average home price fell 2.1% compared to the same month in 2017. Guelph had the greatest price growth, increasing 9.3%, followed by Niagara Region showing 7.2% growth. Hamilton-Burlington had a good month with a 6.3% price increase, while Oakville-Milton and the GTA increased 3.4% and 2.7%, respectively.
The CREA expects national home sales to come in at its lowest level in five years for 2018, and looking forward to 2019, both sales and prices will be “held in check” by government policies like the stress test.
Ontario experienced a slight recovery in activity this summer, but that’s run its course. In 2019, the CREA forecasts 456,200 home sales, which would be a nine-year low for MLS activity. Though there is supposed to be a rebound in Ontario.
By the end of this year, the CREA predicts the national average price will be $488,600, which is 4.2% lower than 2017. Ontario home prices will have dropped 2.6% by the end of 2018, mostly due to fewer high priced home sales in Toronto. There is usually an increase in prices and sales in Toronto during the spring, but that failed to materialize this year.
In 2019, the CREA forecasts the average price coming in at $496,800, which would be a 1.7% increase. And Ontario is expected to be one of the main reasons for the average price increase.