Canadian home sales edge down in April

OTTAWA – May 17th, 2011 – Statistics released today by The Canadian Real Estate Association (CREA), reveal that national resale housing activity softened in April when compared to March 2011.


The decline in April sales activity reflects changes to mortgage regulations that came into effect previously. As anticipated, the changes pulled forward some sales activity that would have otherwise occurred at a later date.

Seasonally adjusted national home sales activity was down 4.4 per cent in April 2011 compared to the previous month. As expected, declines were largest in some of Canada’s more expensive and active markets, including Toronto, Vancouver, and the Fraser Valley.

Changes to mortgage regulations and other transitory factors also boosted transactions in April last year at the expense of activity in subsequent months. This also contributed to a broadly based decline in sales activity in April 2011 compared to year-ago levels.

Actual (not seasonally adjusted) activity was down 14.7 per cent from levels reported last April.

“Although down nationally, sales activity in April this year compared to April last year was up in a number of local housing markets,” said Gary Morse, CREA’s President. “Housing market trends often evolve and diverge from national trends due to local factors, so buyers and sellers should consult their local REALTOR® to understand how the housing market is shaping up where they live.”

“Last April, several transitory factors artificially boosted sales. This included the impending tightening of mortgage rules, speculation about higher interest rates and the looming introduction of the HST in some provinces. This year, additional measures to tighten mortgage rules were implemented in March and the other transitory factors were absent,” said Gregory Klump, CREA’s Chief Economist. “This makes it difficult to compare the two months in order to reliably gauge the impact of the latest round of mortgage rule changes.”

The number of newly listed homes edged up 1.3 per cent in April from the previous month on a seasonally adjusted basis, but remained well below levels in January and February, when impending changes to mortgage regulations were announced.

With fewer sales and an increase in newly listed homes, the national housing market moved further into balanced territory in April. The national sales-to-new listings ratio, a measure of market balance, stood at 52.5 per cent in April, down from 55.7 in March.

More than two-thirds of local markets in Canada were balanced in April. Almost half of the remainder could be classified as sellers’ markets based on a ratio of sales to new listings above 60 per cent.

The number of months of inventory represents the number of months it would take to sell current inventories at the current rate of sales activity, and is another measure of the balance between housing supply and demand. The seasonally adjusted number of months of inventory stood at six months at the end of April on a national basis, up from 5.7 months in the previous month.

The national average price for homes sold in April 2011 was $372,544, up eight per cent from the same month last year. April marked the third consecutive month in which the national average price was up by eight per cent from year-ago levels.

The national average price has been skewed in recent months due to surging multi-million dollar property sales in selected areas of Greater Vancouver. Demand for these properties moderated in April from the previous month. A reduction in this source of upward skewing for the national average price was offset by fewer sales of lower priced properties.

“Changes to mortgage regulations that took effect in April 2011 likely sidelined a number of first-time homebuyers,” said Klump. “By contrast, higher end home sales in Greater Vancouver and Toronto had their best April ever.”

Copyright CREA reprinted with permission

MLS® Real Estate Recovery Hits the Kootenay’s.

If the MLS® story in 2008 was about peak inventory levels, the story in 2009 was about trying to predict when the sluggish real estate market in the Kootenay’s would recover. When compared to past real estate statistics of Total MLS® Sales from 1989 to 2009, the 1st Quarter of
2009 ranked the second worst on record. The 2nd Quarter ranked dead last. It wasn’t until the 3rd Quarter of 2009 that the MLS® markets started to recover, moving up the ranking to a respectable 13. 2009 ended with Kootenay real estate markets in full recovery mode and a 4th quarter ranking showing a very respectable 4th when compared to market performance over the last 21 years.

Kootenay Real Estate Board President Jim Barber comments: “We all expected that 2009 would be an interesting year with consumers waiting for the financial markets to stabilize before making decisions on buying real estate. The very low 1st and 2nd Quarter MLS® Total Unit Sales statistics show that there was a patient buyer population out there waiting for the right combination of interest rate and real estate price adjustments. As we moved into the 3rd Quarter, affordability spiked as those adjustments occurred, and that group or buyers entered back into our markets, setting the stage for a strong end to the year.”

When asked about his predictions for real estate markets in the Kootenay’s for 2010 President Barber remarked: “Generally, I’m cautiously optimistic about Kootenay Real Estate Markets in 2010. Our Provincial and National Real Estate Association Economists are indicating we are out of the “technical recession” and they are predicting an increase in the number of MLS® Unit Sales across the province. Market conditions are still good for buyers as interest rates remain low, and the inventory of housing stock slightly higher than average. We continue to move towards a position of balance in the market as inventory levels decline and interest rates trend higher in the last half of 2010. Overall it should be another reasonably good year for the real estate buying public.”

MLS® Dollar Volume of all sales processed through the Kootenay Real Estate Board reached almost $640 Million Dollars in 2009, a drop of 17% from 2008 levels of over $768 Million Dollars of real estate changing hands. MLS® Unit Sales finished 2009 down 13% when compared to total MLS® Unit Sales in 2008. The price of the average Residential Detached house sold on the Multiple Listing Service® (MLS®) in 2009 declined 8% to $291,561 compared to the amount of $316,600 reported in 2008.

Kootenay Real Estate Board Nelson, BC January 15, 2010