The year may have started off slow for national housing activity, but it looks like 2019 is going to end on a good note, according to the latest monthly report from the Canadian Real Estate Association.
Based on MLS systems across the country, sales activity in October 2019 was nearly 20% higher than the six-year low hit in February 2019, but there was a slight dip in sales in the Greater Toronto Area and Hamilton-Burlington.
"Steady national activity in October hides how the mortgage stress-test remains a drag on many local housing markets where the balance between supply and demand favours homebuyers in purchase negotiations," says Jason Stephen, president of CREA. "That said, all real estate is local, so market balance varies depending on location, housing type, and price segment. Nobody knows that better than a professional REALTOR®, your best source for information and guidance when negotiating the sale or purchase of a home.”
On a national level, new listings fell 1.8%, with the biggest drops in the GTA and Ottawa. With sales activity steadily rising and new listings gradually dropping, the country’s market is tightening.
As of the end of October, there were 4.4 months of inventory across Canada, which is the lowest supply since April 2017. The long-term average is 5.3 months. It’s important to remember that Canadian markets differ significantly when it comes to supply challenges. For example, the Prairies and Newfoundland and Labrador are oversupplied, while Ontario is lacking supply.
"It's a full-blown buyer's market or on the cusp of one in a number of housing markets across the Prairies and in Newfoundland," says Gregory Klump, CREA's Chief Economist. "Homebuyers there have the upper hand in purchase negotiations and the mortgage stress-test has contributed to that by reducing the number of competing buyers who can qualify for mortgage financing while market conditions are in their favour."
Though listings were down in the GTA, the CREA notes that home prices are rebounding in the Greater Golden Horseshoe, and Ontario as a whole is experiencing slightly aggressive price acceleration.
The national average home price in October 2019 was approximately $525,000. If you remove the most expensive markets — the GTA and Greater Vancouver — then the average is closer to $400,000.