BCREA Housing Market Update for January 2014
Watch BCREA Chief Economist Cameron Muir discuss the latest Real Estate statistics and what is expected for 2014.
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Average Canadian House Price Up 10% to $389,119; Gains Seen in All Housing Types in December Over 2012, CREA says
This article appeared on CBC.ca on January 15th, 2014.
The average price of a Canadian home increased 10.4 per cent to $389,119 in December, compared to the same month in 2012.
The Canadian Real Estate Association (CREA) released data Wednesday showing that a total of 457,893 homes changed hands in Canada last year, an increase of about 0.8 per cent from 2012’s level.
MAP: House prices across Canada
“Absent further mortgage rule changes,” CREA’s chief economist Gregory Klump said, “sales in 2014 may surpass the annual total for 2013 if demand holds steady near current levels as strengthening economic and better job growth offset the impact of further expected marginal mortgage interest rate increases.”
As has been the case for some time now, CREA says the large jump in prices was largely due to what was happening in Canada’s most active and expensive markets.
Broad gains
Sales activity in December 2012 in Toronto and Vancouver was abnormally low, which dropped the national average at that time.
“Removing Greater Vancouver and Greater Toronto from national average price calculations cuts the year-over-year increase to 4.6 per cent,” CREA said.
CREA says the average price can be misleading, as it can be too easily influenced by individual factors.
The realtor group says its MLS Home Price Index “provides a better gauge of price trends because it is not affected by changes in the mix of sales activity the way that average price is.”
That index shows home prices rose 4.31 per cent over the past 12 months. Gains were seen in all housing types.
The index was led by an 8.7 per cent gain in Calgary and a 6.3 per cent gain in Toronto.
Vancouver’s market index posted a second straight increase of 2.13 per cent after declines for much of the time between late 2012 and late 2013.
Soft landing?
Economists and policy-makers have been scrutinizing the Canadian housing market for indications of weakness and warning signs of a possible crash.
However, BMO senior economist Robert Kavcic said it was hard to find evidence to suggest anything but a soft landing for the market.
“Look for current balanced conditions and somewhat higher interest rates to lead to steady sales this year, with price growth tucked neatly below the rate of income growth,” Kavcic said.
Home Sales in Canada Down in December: CREA
This article was posted on CBC.ca on January 15th, 2014 and was written by Craig Wong of The Canadian Press.
OTTAWA — Canadian home sales were up from a year ago in December, but slid lower compared with the previous month for the third consecutive time, the Canadian Real Estate Association says.
The industry association said Wednesday that the number of sales last month was up 12.9 per cent compared with December 2012, and the national average price was up 10.4 per cent to $389,119.
However the December’s sales, through the multiple listing service, were down 1.8 per cent from November, continuing a downward trend that began with CREA’s October report.
Read more: http://www.ctvnews.ca/business/home-sales-in-canada-down-in-december-crea-1.1640078#ixzz2qa3VrnmV
“Activity has gradually eased back from stronger than expected levels last summer and is now roughly in line with the 10-year monthly average,” CREA president Laura Leyser said.
“We’ll likely continue getting mixed signals in the months ahead, with positive year-over-year comparisons for sales masking the recent moderation in the monthly sales trend.”
For the full year, there were 457,893 homes sold through the MLS system, up eight-tenths of a per cent from 2012.
Economists and policy-makers have been scrutinizing the Canadian housing market for indications of weakness and warning signs of a possible crash.
However, BMO senior economist Robert Kavcic said it was hard to find evidence to suggest anything by a soft landing for the market.
“Look for current balanced conditions and somewhat higher interest rates to lead to steady sales this year, with price growth tucked neatly below the rate of income growth,” Kavcic said.
TD economist Diana Petramala noted that some of the weakness in December may have been due to the freezing weather.
“However, higher mortgage interest rates appear to be taking some steam out of home demand, particularly for first time homebuyers,” Petramala wrote in a report.
“Five-year mortgage rates have risen by 70 basis points since May. Going forward, a continued increase in longer term interest rates will offset improving economic conditions, helping to keep home sales stable in 2014 and 2015.”
While home sales in December were down compared with November on a national basis, roughly 60 per cent of the local markets across the country saw lower sales.
Declines in Calgary, Edmonton and Toronto more than offset gains in Vancouver, the Fraser Valley and St. Catharines, Ont.
Meanwhile, the number of newly listed homes fell 4.3 per cent on a month-over-month basis in December.
The national sales-to-new listings ratio climbed to 55 per cent in December compared to 53.6 per cent in November.