According to statistics released by The Canadian Real Estate Association, existing home sales activity remained upbeat in November 2009. The current strength of housing demand stands in sharp contrast to weak activity recorded one year ago.
A total of 36,383 residential properties traded hands via the Multiple Listing Service® (MLS®) of Canadian real estate boards in November 2009. Up 73 per cent from year-ago levels, activity was down just four tenths of a per cent from the highest level of activity for the month posted in November 2007. Home sales set new records for the month of November in Ontario and Quebec.
“National home sales activity last month shows how strongly the housing market has rebounded since the beginning of the year,’ said CREA President Dale Ripplinger. “As we predicted last April, the rebound in resale housing activity led the overall Canadian economy out of recession.”
The unprecedented year-over-year gain in activity underscores the extent to which demand has recovered from one year ago, when news of the global financial crisis hammered consumer confidence. Year-over-year gains were biggest in British Columbia (165 per cent) and Ontario (77 per cent).
Since the beginning of 2009, some 437,507 homes have been sold through Canadian MLS® Systems. This is up five per cent from activity in the first 11 months of 2008, but below levels for the period in each of the previous three years.
The national residential average price was $337,231 in November, a gain of 19 per cent compared to one year ago. For the year-to-date, the average price is up 4.4 per cent compared to the same period last year. The year-over-year increase in November continues to reflect the high degree to which the average was skewed downward last year by plummeting activity in Canada’s priciest markets, and then upward by rebounding activity. Average price in November edged back from the peak reached in October.
The price trend is similar but less dramatic for the national MLS® weighted average price, which compensates for changes in provincial sales activity by taking into account provincial proportions of privately owned housing stock. The weighted average price climbed 13 per cent on a year-over-year basis in November. This is a smaller increase compared to the year-over-year gain of 14 per cent recorded the previous month.
The residential average price in Canada’s major markets was up 20 per cent year-over-year to $368,665. As with the national counterpart, the price trend is similar but less dramatic for the major market weighted average price which rose 11 per cent from last November.
The return of strong demand and headline average price gains is beginning to draw more sellers back to the market. Seasonally adjusted new listings coming onto Boards’ MLS® Systems across Canada rose five per cent on a month-over-month basis in November to 69,110 units. This is the biggest monthly increase since January 2008.
Despite the uptick in new listings, the sharp rise in resale housing demand continues to draw down inventories. There were 183,710 homes listed for sale on Boards’ MLS® Systems in Canada at the end of November 2009. This is down 23 per cent from levels reported one year ago, and the seventh month in a row in which inventories have declined from year-ago levels.
Nationally, there were four months of inventory in November 2009 on a seasonally adjusted basis, the lowest level in more than two years. The actual (not seasonally adjusted) number of months of inventory in November 2009 stood at five months, up slightly from the previous month (4.6 months). An increase is normal at this time of year, since demand tends to ease relative to supply over autumn and winter months. The number of months of inventory is the number of months it would take to sell current inventories at the current rate of sales activity.
“The latest batch of seasonally adjusted statistics may reflect distortions in the seasonal adjustment procedure due to an extraordinarily weak housing market one year ago,” said CREA Chief Economist Gregory Klump. “Deteriorating housing affordability will reign in sales activity as the overall economy further improves and the pool of buyers who qualify for financing shrinks.”
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