National home sales in January were up from the previous month but remained below levels recorded one year ago, suggesting homebuyers are still struggling with mortgage stress test rules.
Sales climbed 3.6 per cent between December and January but actual activity was down by four per cent from a year ago, the Canadian Real Estate Association (CREA) reports. “Homebuyers are still adapting to tightened mortgage regulations brought in last year,” says President Barb Sukkau. “However, their impact on homebuyers varies by location, housing type and price segment. All real estate is local.”
Other highlights: the number of newly-listed homes edged up one per cent month-over-month in January – led by a jump in new supply in Greater Vancouver and Hamilton-Burlington – but the national average sale price fell by 5.5 per cent year-over-year.
“Sales, market balance and home price trends are out of synch among major Canadian cities that have the greatest impact on national results,” says Gregory Klump, CREA’s Chief Economist. “Notwithstanding the intended consequences, tighter mortgage regulations that took effect in 2018 combined with previous tightening will weigh on economic growth this year.”
The number of months of inventory represents how long it would take to liquidate current inventories at the current rate of sales activity. The national reading is well balanced at 5.3 months of inventory but there are significant regional differences, CREA notes. It’s a buyer’s market in the Prairie provinces and Newfoundland & Labrador and it remains a seller’s market in Ontario and Prince Edward Island.