Posted by & filed under CREA.

Tue, 09/15/2015 – 09:00

Ottawa, ON, September 15, 2015 - According to statistics1 released today by The Canadian Real Estate Association (CREA), national home sales activity posted a small month-over-month increase in August 2015.

Ottawa, ON, September 15, 2015 -According to statistics1 released today by The Canadian Real Estate Association (CREA), national home sales activity posted a small month-over-month increase in August 2015.

Highlights:

  • National home sales edged up by 0.3% from July to August.
  • Actual (not seasonally adjusted) activity stood 4.0% above August 2014 levels.
  • The number of newly listed homes rose 0.5% from July to August.
  • The Canadian housing market remains balanced overall.
  • The MLS® Home Price Index (HPI) rose 6.43% year-over-year in August.
  • The national average sale price rose 8.7% on a year-over-year basis in August; excluding Greater Vancouver and Greater Toronto, it increased by 4.2%.

The number of homes trading hands via MLS® Systems of Canadian real estate Boards and Associations edged up 0.3 per cent in August 2015 compared to July and remains near levels that have changed little since reaching a five-year high in May. (Chart A)

Sales were little changed on a month-over-month basis among all local markets in August, with an even split between markets posting increases and those with declines.

“August marked the fourth month in a row for strong and stable national sales activity,” said CREA President Pauline Aunger. “While home prices increased in British Columbia and in the Greater Toronto Area, they have been holding fairly steady in many other parts of the country for some time now. All real estate is local and REALTORS® remain your best source for information about sales and listings where you live or might like to in the future.”

“Prices continue to rise in Ontario and British Columbia, where listings are either in short supply or heading in that direction,” said Gregory Klump, CREA’s Chief Economist. “August also provided early evidence that modest price growth is re-emerging in some markets in Quebec and New Brunswick. The continuation of low interest rates is supporting home sales and price trends, and is likely to keep doing so for some time.”

Actual (not seasonally adjusted) activity in August 2015 was up four per cent from the same month last year. It was the third highest August sales figure on record after 2005 and 2007, and stood 6.6 per cent above the 10-year average for August.

Actual (not seasonally adjusted) sales were up from year-ago levels in a little over 60 per cent of all local markets, led by the Lower Mainland region of British Columbia and the Greater Toronto Area (GTA). Sales in Calgary continued to post the largest year-over-year declines after having run near record levels there last year.

The number of newly listed homes edged up by 0.5 per cent in August compared to July, led by gains in Edmonton and the GTA.

The national sales-to-new listings ratio was 56.7 per cent in August, down slightly from 56.9 per cent in July. A sales-to-new listings ratio between 40 and 60 per cent is generally consistent with balanced housing market conditions, with readings above and below this range indicating sellers’ and buyers’ markets respectively.

The ratio was within this range in a little under half of local housing markets in August. More than one-third of all local markets breached the 60 per cent threshold in August, comprised mostly of markets in British Columbia together with those in and around the GTA.

The number of months of inventory is another important measure of the balance between housing supply and demand. It represents the number of months it would take to completely liquidate current inventories at the current rate of sales activity.

There were 5.6 months of inventory on a national basis at the end of August 2015, unchanged from the previous three months and holding at a three-year low for the measure.

The Aggregate Composite MLS® HPI rose by 6.43 per cent on a year-over-year basis in August, accelerating from the 5.90 year-over-year gain in July and 5.43 per cent in June. This recent acceleration in year-over-year growth follows gains that held steady within a range of about five and five-and-a-half per cent. (Chart B)

Year-over-year price growth picked up in August for all Benchmark home types tracked by the index with the exception of townhouse/row units.

Two-storey single family homes continue to post the biggest year-over-year price gains (+8.85 per cent), followed by one-storey single family homes (+6.09 per cent), townhouse/row units (+4.29 per cent) and apartment units (+3.08 per cent).

Year-over-year price growth varied among housing markets tracked by the index. Greater Vancouver (+11.96 per cent) and Greater Toronto (+9.99 per cent) continue to post by far the biggest year-over-year price increases. By comparison, year-over-year price growth in the Fraser Valley accelerated to about seven per cent, while Victoria and Vancouver Island prices logged year-over-year gains of about five per cent in August.

Prices in Calgary were flat on a year-over-year basis in August, marking the first month since September 2011 of no year-over-year price growth. Prices in Saskatoon also ran roughly even with year-ago levels.

Elsewhere, home prices were up from August 2014 levels by about one-and-a-half per cent in Greater Montreal, by about one per cent in Greater Moncton, and by about half of one per cent in Ottawa. Prices fell by about three-and-a-half per cent in Regina, extending year-over-year price declines there that began in 2013. (Table 1)

The MLS® Home Price Index (MLS® HPI) provides a better gauge of price trends than is possible using averages because it is not affected by changes in the mix of sales activity the way that average price is.

The actual (not seasonally adjusted) national average price for homes sold in August 2015 was $433,367, up 8.7 per cent on a year-over-year basis.

The national average price continues to be pulled upward by sales activity in Greater Vancouver and Greater Toronto, which are among Canada’s most active and expensive housing markets. If these two markets are excluded from calculations, the average is a more modest $338,755 and the year-over-year gain is reduced to 4.2 per cent.

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PLEASE NOTE: The information contained in this news release combines both major market and national sales information from MLS® Systems from the previous month.

CREA cautions that average price information can be useful in establishing trends over time, but does not indicate actual prices in centres comprised of widely divergent neighbourhoods or account for price differential between geographic areas. Statistical information contained in this report includes all housing types.

MLS® Systems are co-operative marketing systems used only by Canada’s real estate Boards to ensure maximum exposure of properties listed for sale.

The Canadian Real Estate Association (CREA) is one of Canada’s largest single-industry trade associations, representing more than 109,000 REALTORS® working through some 90 real estate Boards and Associations.

Further information can be found at http://crea.ca/statistics.

For more information, please contact:

Pierre Leduc, Media Relations
The Canadian Real Estate Association
Tel.: 613-237-7111 or 613-884-1460
E-mail: pleduc@crea.ca

Posted by & filed under CREA.

Tue, 09/15/2015 – 08:58

Ottawa, ON, September 15, 2015 – The Canadian Real Estate Association (CREA) has updated its forecast for home sales activity via the Multiple Listing Service® (MLS®) Systems of Canadian real estate Boards and Associations for 2015 and 2016.

Ottawa, ON, September 15, 2015 – The Canadian Real Estate Association (CREA) has updated its forecast for home sales activity via the Multiple Listing Service® (MLS®) Systems of Canadian real estate Boards and Associations for 2015 and 2016.

Since CREA’s forecast published in June, the outlook for oil and other natural resource commodities has deteriorated. As a result, the economic and employment backdrop has dimmed for provinces whose prospects rely on their production.

But, the continuation of low interest rates and supportive demographics has resulted in stronger than expected home sales activity in British Columbia and Ontario. These two provinces account for approximately 60 per cent of Canadian housing activity, so stronger than expected trends in these provinces have contributed to an upward revision to CREA’s forecast for national sales activity and average prices.

The national average price has run higher than expected since CREA’s last forecast, in part reflecting a jump in the proportion of higher priced home sales this spring and early summer in B.C.’s Lower Mainland, in and around the Greater Toronto Area (GTA) and Calgary. This trend now appears to be receding, causing the national average price to follow suit.

However, recent trends in the MLS® Home Price Index (MLS® HPI) – which is not affected by changes in the mix of sales activity the way that average price is –  suggest that prices are still accelerating across much of B.C., in and around the GTA and Montreal.

B.C. continues to see some of the strongest economic growth in the country, coupled with strong demographics. Home sales there have been drawing down inventories and boosting prices across the province.

In Alberta, home sales have gone from setting records in 2014 to running at or below their 10-year average, as uncertainty surrounding the outlook for oil prices and employment continues to sideline potential homebuyers.

In Ontario, the ongoing shortage of single family homes for sale in and around the GTA continues to drive very strong price gains. Record levels of activity in the province would likely be higher were it not for a shortage of low-rise homes coming onto the market.

In Saskatchewan, Manitoba, Quebec, and most of Eastern Canada, supply remains elevated. Home prices outside of B.C. and Ontario are forecast to keep pace with or lag inflation, as elevated supplies are drawn down by sales and return to better balance.

The forecast for national sales in 2015 has been revised slightly higher, reflecting stronger than anticipated activity in B.C. and Ontario. National sales are now projected to rise by 3.3 per cent to 495,800 units in 2015, marking the second strongest year on record for home sales in Canada.

Across the country, British Columbia is projected to post the largest annual increase in activity in 2015 (+18.1 per cent). Alberta, Saskatchewan, and Nova Scotia are expected to post the largest annual sales declines (-21.6 per cent, -12.0 per cent, and -12.1 per cent respectively). Activity in Manitoba is forecast to rise by 2.2 per cent this year.

Home sales in Ontario are projected  to rise by 7.3 per cent in 2015, while sales in Quebec are forecast to rise 4.6 per cent compared to a sluggish 2014.

In Eastern Canada, where activity tends to be more volatile, sales in New Brunswick and Prince Edward Island have surprised on the high side in recent months, while sales in Nova Scotia have remained weaker than previously forecast.

Home sales in New Brunswick are now expected to post an annual increase of 5.1 per cent in 2015. Activity in Prince Edward Island is set to rebound by 14.9 per cent over 2014, when sales slowed to their lowest level in over a decade. Sales activity in Newfoundland and Labrador is projected to remain little changed (+0.5 per cent).

The forecast for national average home price growth has been revised up slightly to $433,600 in 2015, representing an annual increase of 6.2 per cent. The upward revision reflects average price gains in British Columbia and Ontario together with a projected increase in their proportion of national sales. British Columbia is expected to be the only province where the average home price rises faster (8.5 per cent) than the national average, while the rise in Ontario’s average price (6.0 per cent) is forecast to be roughly in line with the national increase.

Average prices in 2015 among other provinces are projected to remain stable, with annual gains in Manitoba (+1.6 per cent), Quebec (+1.4 per cent), and Nova Scotia (+2.9 per cent) and declines in New Brunswick (-2.7 per cent), Prince Edward Island (-0.9 per cent) and Newfoundland and Labrador (-0.4 per cent).

In 2016, national sales are forecast to number 495,000, which is little changed compared to forecast sales for 2015. Activity gains in Quebec and some improvement in Prairie provinces are expected to offset a slight cooling for activity in B.C. and Ontario, where affordability for single family home buyers is anticipated to become strained.

Elsewhere, strengthening economic prospects are expected to translate into slow and steady sales gains among provinces where home sales have struggled while prices remained more affordable due to an elevated supply of listings. The exception is in Newfoundland and Labrador, where economic and demographic challenges are expected to persist in 2016.

The national average price is forecast to edge higher by two per cent to $442,400 in 2016. Increases are forecast to be slightly larger but less than three per cent in British Columbia, Saskatchewan, Manitoba, Ontario, New Brunswick, and Prince Edward Island, with gains in some provinces reflecting an expected rebound from levels in 2015.

Price growth in 2016 is forecast to be strongest in Ontario (+2.8 per cent) due to an ongoing supply shortage of listings for low rise homes in and around the Greater Toronto Area. Alberta and Quebec are forecast to see average home price growth of about 1.7 and 0.8 per cent respectively in 2016, while Nova Scotia and Newfoundland and Labrador are forecast to edge slightly lower.

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About The Canadian Real Estate Association

The Canadian Real Estate Association (CREA) is one of Canada's largest single-industry trade associations, representing more than 100,000 real estate Brokers/agents and salespeople working through more than 100 real estate Boards and Associations.

For more information, please contact:

Pierre Leduc, Media Relations
The Canadian Real Estate Association
Tel.: 613-237-7111 or 613-884-1460
E-mail: pleduc@crea.ca­

 

Posted by & filed under CREA.

Thu, 09/10/2015 – 12:47

The Bank of Canada announced on September 9th, 2015 that it was keeping its trend-setting target overnight lending rate at 0.5 per cent.

The Bank of Canada announced on September 9th, 2015 that it was keeping its trend-setting target overnight lending rate at 0.5 per cent.

Little has changed since the Bank’s previous announcement and revised economic forecast published in July. Its September announcement serves as a placeholder as the Bank awaits more economic data prior to the release in October of its Monetary Policy Report which will be published two days after the federal election.

Previously, the Bank said it expected most of economic damage from the oil price shock would be “front loaded”, with the hit to economic growth being sharp but contained mostly in the first half of the year. However, in its September announcement, the Bank said that the adjustments stemming for the oil shock “are complex and are expected to take considerable time”.

This suggests that the Bank may soon revise its economic forecast in October to reflect how ongoing weakness in the oil patch may continue to offset strength in other sectors of the economy and lead to weaker than currently projected economic growth over the second half of the year.

At this point, the Bank is unlikely to be concerned with the need to fight inflation by raising interest rates. Headline inflation continues to trend near the bottom of the Bank’s target range between 1 and 3 per cent, mostly because of oil prices. Core inflation is hovering near two per cent. Underlying inflation is likely somewhere slightly below two per cent.

The Bank’s September announcement was shorter than usual and acknowledged increased uncertainty while highlighting both upside and downside risks to growth. The Bank now has until October to gauge how it thinks the economy will evolve over the rest of this year. In the meantime, interest rates will remain very supportive for household spending and the housing market.

As of September 9th, 2015, the advertised five-year lending rate stood at 4.64 per cent, unchanged from the previous Bank rate announcement on July 15th, and down 0.15 percentage points from one year ago.

The next interest rate announcement will be on October 21st, 2015, and will be accompanied by an update to the Monetary Policy report.

(CREA 09/09/2015)

Posted by & filed under CREA.

Wed, 09/09/2015 – 15:42

The Canadian Real Estate Association (CREA) welcomes Leader of the Liberal Party of Canada Justin Trudeau’s campaign promise to modernize the Home Buyer’s Plan (HBP), if elected, by enabling Canadians impacted by significant life changes to access the program and use money from their Registered Retirement Savings Plan (RRSPs) to buy a house without tax penalty.

The Canadian Real Estate Association (CREA) welcomes Leader of the Liberal Party of Canada Justin Trudeau’s campaign promise to modernize the Home Buyer’s Plan (HBP), if elected, by enabling Canadians impacted by significant life changes to access the program and use money from their Registered Retirement Savings Plan (RRSPs) to buy a house without tax penalty.

The HBP is a REALTOR®-driven initiative, introduced by the government as a short-term stimulus measure in 1992 and made a permanent program in 1994. Since its inception, over 2.8 million Canadian have used the HBP to help make home ownership more affordable. The program allows Canadians to borrow, on a repayable basis, from their own Registered Retirement Savings Plans (RRSPs) to purchase a home.

Expanding the HBP to help Canadians maintain homeownership after a significant life change, such as job relocation, the death of a spouse, marital breakdown, or a decision to accommodate an elderly family member, has been a REALTOR® Action Issue since 2011.

Home purchases involving the HBP generate spin-off spending and create jobs. In 2015, home purchases involving the use of the HBP are projected to result in over $2.8 billion in spin-off spending and more than 19,900 jobs.

For more information on the Liberal Party of Canada’s announcement, please review the Affordable Housing for Canadians backgrounder on the party’s website.

For more information on CREA’s proposal on this topic, please review our Support Canadian Workers Through Job Relocation infographic on REALTOR Link®.