CREA News

OTTAWA – May 25th, 2012 – According to statistics released today by The Canadian Real Estate Association (CREA), the MLS® Home Price Index, the leading measure of Canadian home prices, increased in April 2012.

Highlights:

• The Aggregate Composite MLS® Home Price Index in April 2012 was up 5.2% year-over-year.
• Toronto again posted the largest year-over-year increase (7.9%), with more modest gains in Calgary (4.0%), Vancouver (3.7%), the Fraser Valley (2.7%), and Montreal (2.3%).
• Year-over-year price gains accelerated in April in Toronto and Calgary but slowed in Vancouver and the Fraser Valley and were little changed in Montreal.
• Single family home prices again posted the biggest gains (6.4%), with apartment unit and townhome sales making more modest headway (3.6% and 2.7% respectively).

The MLS® Home Price Index (MLS® HPI) rose 5.2 per cent year-over-year in April 2012. The increase was similar to those for the previous two months and among the smallest since last August. However, the moderation in overall price gains in recent months masks diverging trends among the major Canadian markets.

In April, the MLS® HPI again posted the largest year-over-year increase in Toronto (7.9%), followed by Calgary (4.0%), Vancouver (3.7%), the Fraser Valley (2.7%), and Montreal (2.3%).

Year-over-year price growth in Greater Vancouver slowed markedly in April and moderated in the nearby Fraser Valley. By contrast, Montreal — a market that tends towards more stable price growth — saw a small uptick in line with the aggregate index.

Toronto’s price index accelerated for the second straight month, consistent with its market balance where negotiations continue to favour the seller. Calgary is also now seeing prices begin to advance in earnest, supported by a strong economic outlook, recent gains in in-migration, and strong full-time job growth.

“Canadian home price gains are generally expected to moderate, but there are a few hot spots where prices are being fuelled by some very strong housing market fundamentals,” said Wayne Moen, CREA’s President. “Toronto has less than two months of supply compared to six months nationally, so it ranks among the tightest of Canadian housing markets. With prices moderating in some housing markets and bucking the trend in others, buyers and sellers should talk to their local REALTOR® to best understand how home price trends are evolving where they live.”

Among the different housing types tracked by the index, single family homes again posted the biggest year-over-year gains in April (6.4%), led by two-storey single family homes (6.9%). The MLS® HPI for one-storey single family homes rose 5.6 per cent from April 2011, while townhouses and apartments saw gains of 3.6 per cent and 2.7 per cent, respectively.

“Just as there are some pretty clear differences emerging across markets right now, there have also been some interesting developments in price trends across housing types,” said Gregory Klump, CREA’s Chief Economist. “The one that really stood out in April was accelerating price growth for the townhouse segment right across the board. In Vancouver and the Fraser Valley, it was the only segment in which prices gains accelerated.”

In focus: Price growth among housing types

The MLS® HPI tracks four different Benchmark housing categories: one- and two-storey single family homes, townhouses, and apartment units. Based on detailed characteristics specific to each neighbourhood, Benchmark prices are aggregated for each metropolitan market and the headline Aggregate Composite MLS® HPI.

Two-storey single family homes are generally (with the exception of Montreal) the most expensive of the four Benchmark categories, followed by one-storey single family homes, townhouses, and condo apartment units.

From the depths of the economic recession of early 2009 and over 2010, prices in all Benchmark housing categories exhibited similar trends.

However, beginning in early 2011, price gains for one- and two-storey single family homes were bigger than they were for townhouses and condo apartment units, and accelerated faster. The difference in year-over-year price gains between single family homes and the other Benchmark housing categories is now bigger than at any other time since 2005.

As a result, the townhouse and apartment units have remained relatively more affordable than one- and two-storey single family homes since 2005 from the standpoint of price. For this reason, the recent acceleration in townhome prices in all markets tracked by the index may indicate the beginning of a shift in demand away from the increasingly expensive single family sector.

A similar acceleration in prices has yet to materialize for apartment units, which are more affordable than townhouses from a price standpoint. One reason for this could be that as an alternative to expensive single family homes, townhouses are viewed more favourably than apartments by families looking for housing in more centrally located areas. The apartment segment is also better supplied, and recent trends for multiple units under construction suggest that this may remain the case going forward. Another reason might also be the almost daily news media stories about potential price corrections in condo markets.

For additional information, including interactive tables, please go to: www.homepriceindex.ca.

MLS® is a co-operative marketing system 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 100,000 REALTORS® working through more than 100 real estate Boards and Associations.

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

OTTAWA – May 15, 2012 – According to statistics released today by The Canadian Real Estate Association (CREA), national resale housing activity edged up by less than one per cent in April 2012.

Highlights:

• Home sales up 0.8% from March to April.
• Actual (not seasonally adjusted) activity stood 11.5% above levels in April 2011.
• The size of the year-over-year increase reflects a slowdown in sales last April following changes to mortgage rules which came into effect on March 18, 2011.
• The number of newly listed homes edged back 0.2% from March to April.
• While still well balanced, the combination of stable new listings and slightly higher sales activity resulted in a tighter national housing market.
• The national average home price edged up 0.9% on a year-over-year basis in April.

Sales over MLS® Systems of real estate Boards and Associations in Canada edged up 0.8 per cent from March to April 2012, putting them on par with levels reported in the same month two years earlier.

Activity was either up or held steady in half of all local markets in April, with Toronto and Calgary posting the biggest monthly increases for the second month in a row. Activity gains in Montreal, Winnipeg, Edmonton, as well as London and St. Thomas also made significant contributions to the national sales increase in April. Increased activity in these markets offset monthly declines in Ottawa, Windsor-Essex, Quebec City, the Fraser Valley, and Vancouver.

“A number of Canadian housing market trends in April remained intact from the previous month,” said Wayne Moen, CREA President. “Trends in Vancouver and Toronto continue to diverge. These two housing markets have an obvious influence on national statistics and a high profile, but Canada is a big place. Trends in housing markets differ across Canada, and as all housing is local, buyers and sellers should speak to their local REALTOR® to better understand current and prospective trends where they live.”

Actual (not seasonally adjusted) activity stood 11.5 per cent above levels in April 2011, reflecting the slowdown in sales following changes to mortgage regulations that came into effect in March of last year.

A total of 157,804 homes have traded hands so far this year, up 6.4 per cent from levels reported in the first four months of 2011 and about four per cent above both the five- and 10-year averages for sales during the first third of the year.

The number of newly listed homes was little changed in April compared to March, having edged back 0.2 per cent on a month-over-month basis. The number of markets in which new listings rose (45) ran almost even with those where new listings eased (54).

The national housing market tightened marginally in April due to higher sales and stable new listings, but remains firmly entrenched in balanced market territory. The national sales-to-new listings ratio, a measure of market balance, stood at 55.9 per cent in April, up slightly from its March reading of 55.4 per cent. Based on a sales-to-new listings ratio of between 40 to 60 per cent, the number of local markets that were in balanced market territory in April (59) was up slightly from March (56).

Nationally, the number of months of inventory stood at 5.6 months at the end of April, unchanged from levels reported in March. The number of months of inventory represents the number of months it would take to sell current inventories at the current rate of sales activity, and is a further measure of the balance between housing supply and demand.

The actual (not seasonally adjusted) national average price for homes sold in April 2012 was $375,810, up 0.9 per cent from the same month last year. While more or less flat compared to last spring on a national basis, average sale prices were up on a year-over-year basis in 80 per cent of all local markets in April.

“It bears repeating that the national average price was skewed higher last spring by record level high-end home sales in Vancouver’s priciest neighbourhoods, and that a replay of this phenomenon was not expected this year,” said Gregory Klump, CREA’s Chief Economist. “Sales data confirm that high-end activity in Vancouver is well off the peak levels reached at this time last year, which is exerting a gravitational pull on the national average price.”

“By contrast, activity in Toronto is stronger this spring than it was last spring. Higher-priced sales activity there is on the rise and buoying average prices. As the most active housing market in Canada, Toronto is the biggest factor supporting national average price.”

“Netting Vancouver out of the national average price calculation yields a 4.9 per cent year-on-year gain. Netting Toronto out of the national average price calculation, while leaving Vancouver in, produces a 2.2 per cent year-on-year decline. Netting out both Vancouver and Toronto results in a 3.1 per cent increase in average price. On balance, this points to modest price growth amid balanced market conditions in much of the rest of Canada.”

PLEASE NOTE: The information contained in this news release combines both major market and national MLS® sales information 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® is a co-operative marketing system 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 104,000 REALTORS® working through more than 100 real estate Boards and Associations.

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