New home sales in Canada edged up 0.3 per cent in June from the previous month, with gains in the Greater Toronto Area and Montreal offsetting declines in B.C. The incremental gains mark a new period of stability for housing sales after a less-than-stellar 2018 and early 2019, according to the Canadian Real Estate Association’s monthly report.
While seasonally adjusted sales actually fell 0.2 per cent, they remain slightly above year-ago levels.
“The big story here is that sales and prices are essentially flat on a national basis, the market is close to overall balance, and sales activity is almost right on top of its 10-year average,” said Douglas Porter, BMO chief economist. “In other words, the Canadian housing market is now actually kind of boring, which is likely exactly what policymakers would like to see.”
The national average sale price was up 1.7 per cent on a year-over-year basis, coming in at just under $505,500. This figure is heavily skewed by the GTA and GVA markets: removing them would cut the price by $106,000.
On a month-to-month basis, new listings rose by 0.8 per cent.
One thing that hasn’t changed is the increasing deviation between the eastern and western markets in the country.
“While sales activity in Canada’s three westernmost provinces appears to have stopped deteriorating, it will be some time before supply and demand there becomes better balanced and the outlook for home prices improves,” said Gregory Klump, CREA’s chief economist in a press release.
More than 80 per cent of all local markets were in balanced market territory in June, the largest share in three years. The inventory of unsold homes dipped to 5.0 months, the lowest in a year and a half.
“We judge that the overall national market is more likely to strengthen modestly over the next 18 months, and are looking for sales and prices to both rise roughly 2 per cent in 2020,” said Porter. “Maybe not a moonshot, but not a bleak landscape either.”
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