Following a drop in the sale of houses, the Canadian Real Estate Association have updated its forecast for home sales activity.
The Association publishes its forecasts and statistics via the Multiple Listing Service (MLS) Systems of Canadian real estate Boards and Associations, in 2016 & 2017.
The average price of a home in Alberta is forecast for 2016 at $395,400, while Saskatchewan sits at a forecasted price of $292,800. In Lloydminster, Alberta, the average price of a home for May 2016 was $338,098–compared to $357,609 in May 2015.
According to statistics released June 15, 2016, national home sales dropped by 2.8% month-over-month in May 2016, after having broken all previous monthly sales records in April. Sales activity dropped this past month in about 70 per cent of all markets.
“National sales activity is still strong, even after coming off the record levels of the past couple of months,” said CREA President Cliff Iverson. “But, there are housing markets where sales continue to reflect a cautious mood among home-buyers and uncertainty about the local economy,” he added.
National sales activity and average prices reached new heights in the first half of 2016 amid a growing supply shortage of single family homes, in both British Columbia and Ontario, and particularly in B.C.’s Lower Mainland and throughout the Greater Toronto Area (GTA). Price gains in these regions stand in contrast to declines in provinces, like Alberta and Saskatchewan, where the housing market prospects are tied closely to the outlook for the oil patch and other natural resource industries, as they are such a major part of the economies of those provinces. Meanwhile, elsewhere, home prices are growing modestly, such as in Ottawa or Montreal.
As well, the number of newly listed homes fell by 3.2 percent in May 2016 compared to April, and new supply was down in about two-thirds of all local markets, led by the Fraser Valley, Victoria, Edmonton, Montreal and Quebec City.
Another important measure of the balance between housing supply and demand is
the number of months of inventory available, which represents the number of months it would take to completely liquidate current inventories, at the current rate of sales activity. On a national basis, at the end of May this year, there were 4.7 months of inventory. This number is unaltered from April’s reading, but still the lowest level in more than six years.
Months of inventory have been trending lower since early 2015, reflecting increasingly tighter housing markets in B.C. and Ontario. It currently sits at or below two months in a growing number of local markets in British Columbia, the GTA and in Southwestern Ontario.
Sales activity in Greater Vancouver and Greater Toronto continues to pull up the national average price. Those major cities, the latter of which is Canada’s largest city, and fifth largest in all of North America, remain two of Canada’s tightest, most active, and expensive housing markets. The actual (not seasonally adjusted) national average price for homes sold in May 2016 in those places was $509,460, up 13.2 percent on a year-over-year basis.
However, if these two housing markets are excluded from calculations, the average price is a more modest $375,532, with the year-over-year gain trimmed to 9.1 percent.
Even then, the numbers merely reflect a tug of war between extremely strong average price gains in the housing markets of Vancouver and Toronto, versus flat or declining prices across much of the nation. The average price for Canada net of sales in British Columbia and Ontario in May 2016 was down 0.7 percent year-over-year to $310,007.