National average home price heavily skewed by Toronto and Vancouver
By Lucas on Oct 16, 2017
The Canadian Real Estate Association (CREA) released its national home sales statistics, announcing that home sales edged up in September 2017.
When the CREA says sales increased in September, they mean from August 2017; sales went up by 2.1%. On a year-over-year basis, sales are down 11%. The activity increase was led by the Greater Toronto Area (GTA), Vancouver, London and St. Thomas, and Barrie.
Following three consecutive months of decreases in listings, September saw a 4.9% increase, mostly due to a spike in supply in the GTA. This brings the sales-to-new listings ratio to 55.7%. The CREA considers 40% to 60% balanced, but the ideal ratio varies from market to market.
“National sales appear to be stabilizing,” says CREA President Andrew Peck. “While encouraging, it’s too early to tell if this is the beginning of a longer-term trend. The national result continues to be influenced heavily by trends in Toronto and Vancouver but housing market conditions vary widely across Canada. All real estate is local, and REALTORS® remain your best source for information about sales and listings where you live or might like to.”
Nationally, there are five months of inventory. In the Greater Golden Horseshoe (GGH), there are 2.4 months of inventory, which is much higher than the record low of 0.8 months hit in February and March, but still lower than the long term average of 3.1 months.
The average home sale price in Canada went up 2.8% year-over-year to just over $487,000. This average is heavily skewed by Toronto and Vancouver. Taking them out of the equation cuts the average down by more than $100,000 to $374,500.
While price gains slowed in Toronto, Oakville, Milton, and Guelph, the average prices are still well above last year’s averages for the same period. Toronto was up 12.2%, Oakville and Milton up nearly 9%, and Guelph had a large gain of 17.3%.
“Further tightening of federal regulations aimed at cooling housing markets in Toronto and Vancouver risks creating collateral damage in markets elsewhere in Canada,” says Gregory Klump, CREA’s Chief Economist. “It also jeopardizes Canadian economic growth, which is already showing signs of fading.”
With more regulations lingering, it will be interesting to see how the market performs over the next few months.
