A fresh flood of homes on the market sent resale listings to their second consecutive record level in May, while sales activity and price gains both cooled.
There were 54,029 new listings of resale housing units in major markets last month, a 2.2 per cent increase over the seasonally adjusted record hit in April, according to data released Friday by the Canadian Real Estate Association (CREA).
On an unadjusted basis, listings rose to 67,628 units, up 7 per cent from May 2007.
Unlike listings, year-over-year sales levels fell in 18 of the 20 markets in the study for which data were available. Information was not available for the Quebec markets because geographical areas in the province are being redefined.
Unit sales across Canada dropped by 17 per cent this May from the year before on an unadjusted basis, and by 0.5 per cent compared with April, 2008, on a seasonally adjusted basis.
Prices edged up 1 per cent in May from the year before to $337,071, a new record for the average price, but the smallest such increase in more than seven years.
“Rising food, fuel and home prices are denting consumer confidence. Increasingly cautious home buyers may keep listings on the market longer before being sold, which increases the importance of realistic pricing,” Gregory Klump, chief economist at CREA, said in a statement.
The most dramatic surges in new listings occurred in Saskatoon and Regina, a marked reversal from earlier in the year when they were the country's tightest markets in terms of supply.
New resale listings rose by 58 per cent in Regina and 44 per cent in Saskatoon year-over-year in May. During the same month, year-over-year sales fell in those markets by 28 per cent and 37 per cent respectively.
This pattern has already been seen in other markets including Calgary and Edmonton, where tight supply and soaring prices have given way to a cool-down.
Listings in those markets are now retreating from the peak levels reached in March as the market readjusts, with listings up 1 per cent in Calgary and down 9 per cent in Edmonton from the year before.
“It is now becoming increasingly clear that the Canadian housing market is gradually cooling off, with the decline in activity in the West particularly pronounced,” said TD Securities economics strategist Millan Mulraine. “However, we believe that the sector will remain in reasonable shape, and will avoid any U.S.-style housing correction.”
CREA characterized Calgary, Edmonton and Windsor, Ont., – the only three markets where home prices dropped year-over-year in May – as the country's three “most balanced major markets.”
Other data included in the report (all figures compare May, 2008 with May, 2007):
– Markets with the largest increases in listings: Regina (+58 per cent), Saskatoon (+44 per cent), Greater Vancouver (+20 per cent), Victoria (+20 per cent), Sudbury, Ont. (+16 per cent), Ottawa (+16 per cent).
– Markets with the largest drops in listings: Edmonton (-9 per cent), Windsor-Essex (-6 per cent), Newfoundland and Labrador (-6 per cent).
– Markets with the largest decreases in sales: Saskatoon (-37 per cent), Edmonton (-35 per cent), Calgary (-33 per cent), Greater Vancouver (-31 per cent), Regina (-28 per cent).
– Markets with increases in sales (2 of 20): Newfoundland and Labrador (+5.5 per cent), Ottawa (+2.5 per cent).
– Markets with the largest increases in unit price: Regina (+45 per cent), Saskatoon (+29 per cent), Saint John (+22 per cent), Newfoundland and Labrador (+21 per cent).
– Markets with decreases in unit price (3 of 20): Windsor-Essex (-6 per cent), Edmonton (-5 per cent), Calgary (-2 per cent) .
LORI McLEOD, Globe and Mail Update
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