CREA News

Ottawa, ON, November 15, 2012 – According to statistics released today by The Canadian Real Estate Association (CREA), national home sales activity and average price were little changed in October 2012.

Highlights:

• Home sales little changed (-0.1%) from September to October.
• Actual (not seasonally adjusted) activity down 0.8% from October 2011.
• Number of newly listed homes down 3.8% from September to October.
• Market remains firmly in balanced territory.
• National average home price unchanged (+0.02%) on a year-over-year basis.
• MLS® HPI up 3.6% in October – smallest gain since May 2011.

The number of home sales processed through the MLS® Systems of Canadian real estate Boards and Associations was little changed in October 2012 compared to the previous month (-0.1 per cent) and remains below levels reported in the first half of the year.

Chart 1

Sales activity improved in about half of all local markets as compared to September, including Greater Vancouver and Greater Toronto. However, in keeping with the national trend, transactions there remain well below levels posted in the first half of the year.

On a year-over-year basis, actual (not seasonally adjusted) activity was also little changed, down 0.8 per cent from levels recorded for October of last year. Led by Calgary, sales were up compared to levels one year ago in almost two-thirds of all local markets. Sales remained below year-ago levels in Greater Toronto, Greater Vancouver, and Greater Montreal.

“Sales data in October held steady at the national level, but we are seeing some diverging trends among local housing markets,” said CREA President Wayne Moen. “Markets in Alberta and Saskatchewan are gaining strength, while some of Canada’s traditionally most active markets have lost steam. As always, all real estate is local, so buyers and sellers should talk to their REALTOR® to understand how the housing market is shaping up where they live or might like to live.”

“Little has changed since national activity geared down in the wake of mortgage rules that came into force in July,” said Gregory Klump, CREA’s Chief Economist. “Opinions differ about how sharply sales have slowed depending on the local housing market.”

National sales in October were on par with the same month last year and in line with the 10-year average for the month (Chart 1). Activity for the year-to-date is also running in line with the 10 year average (Chart 2).

Chart 2

“These results suggest that the Canadian housing market overall has returned to a more sustainable pace,” added Klump.

A total of 402,322 homes have traded hands via Canadian MLS® Systems over the first 10 months of 2012, up 0.8 per cent from levels reported over the same period last year and 0.4 per cent below the 10-year average for the period.

The number of newly listed homes retreated by 3.8 per cent in October following a jump in September. Monthly declines were reported in almost two-thirds of all local markets, with Greater Toronto and Greater Vancouver exerting a large influence on the national trend.

The monthly decline in new listings caused the national sales-to-new listings ratio to edge back up to 50.9 per cent in October compared to September’s reading of 49 per cent. Based on a sales-to-new listings ratio of between 40 to 60 per cent, nearly two-thirds of all local markets were in balanced market territory in October.

The number of months of inventory is another important measure of the balance between housing supply and demand. It represents the number of months it would take to sell current inventories at the current rate of sales activity. It was another measure that was little changed in October. Nationally, there were 6.5 months of inventory at the end of October. This is virtually unchanged from the reading of 6.4 months at the end of September after accounting for rounding (6.479 in October vs. 6.448 in September).

The actual (not seasonally adjusted) national average price for homes sold in October 2012 was $361,516. This represents an increase of $80, or 0.02 per cent compared to the national average price in October 2011.

The national average price continues to be influenced by compositional factors, most notably by fewer sales in Greater Vancouver this year compared to much stronger levels last year, and more recently by fewer sales in Greater Toronto.

Excluding these two markets from the national average price calculation yields a year-over-year increase of 2.5 per cent, reflecting average sale prices that rose in 70 per cent of all local markets in October 2012.

Unlike average price, the MLS® Home Price Index (MLS® HPI) is not affected by changes in the mix of sales, so it provides the best gauge of Canadian home price trends.

Aggregate Composite MLS® HPI

The Aggregate Composite MLS® HPI rose 3.6 per cent on a year-over-year basis in October. This marks the sixth consecutive month in which the price gain slowed and is the slowest rate of increase since May 2011.

Year-over-year price gains decelerated for all Benchmark property types tracked by the index with the exception of the townhouse/row segment. The townhouse/row segment nonetheless posted the slowest price growth among Benchmark properties.

Year-over-year price growth remains strongest for one-storey single family homes (+5.3 per cent) and two-storey single family homes (+4.5 per cent). Prices for townhouse and apartment units continue to post more modest gains, rising 1.2 per cent and 1.5 per cent respectively.

Most markets continued to see positive but slowing year-over-year price growth in October. The exceptions were Calgary, where price growth accelerated, and Greater Vancouver, where the year-over-year price decline was smaller in October than it was in September.

The MLS® HPI rose fastest in Regina (13.0 per cent year-over-year), but the increase was smaller than it was in September (14.2 per cent).

The MLS® HPI also climbed in Calgary (6.8%), Greater Toronto (5.1%), Greater Montreal (1.8%), and the Fraser Valley (1.5%). In Greater Vancouver, the MLS® HPI eased 0.8 per cent year-over-year in October.

The Bank of Canada announced on October 23^rd, 2012 it is keeping kept its key policy rate at 1 per cent, where it has been held steady for two years. This marks the longest period since the 1950s that rates have been left unchanged.

The announcement was similar to those in September and July, including the bottom line that the Bank would still like its next move to be a rate hike. However, the Bank’s tone surrounding the timing and degree of such a move was softened, saying some “modest withdrawal” of current monetary stimulus – read small increase in interest rates– will “likely” be required “over time”.

Much of the Bank’s latest guidance about factors influencing its decision about where interest rates are headed next (up, down, or stable) was a repeat of messages contained in previous announcements this year. However, something new appeared this time around when the Bank indicated it was concerned about how low interest rates were enticing households to take on more debt, and that it would bear “evolution of imbalances in the household sector” in mind as to when it will raise interest rates.

Although the Bank still expects Canada’s economic outlook to brighten, it reiterated a number of external downside risks that may force it to again lower its expectations. These risks include the fact that “Europe is in recession and recent indicators point to a continued contraction”. The Bank also noted that growth has slowed by more than expected in China and other major emerging economies, but added that there are now signs of stabilization around current growth rates. It also reiterated that economic growth in the United States was continuing at a “gradual pace”.

While that is consistent with inflation and interest rates staying low, the Bank reiterated that prices for oil and many other commodities that Canada exports have recently increased. That means prices at the gas pump have prevented consumer price inflation from retreating further but leaves less money in household budgets for discretionary spending, which in turn will keep economic growth and inflation in check.

Regarding the broader economic picture, the Bank stated “Global financial conditions have improved, supported by aggressive policy actions of major central banks, but sentiment remains fragile.”

The Bank still expects consumer spending and business investment to be the primary drivers of economic growth in Canada next year, spurred on by the continuation of low interest rates. The Bank projects that the economy will grow by 2.2 per cent in 2012, 2.3 per cent in 2013 and 2.4 per cent in 2014. Recent revisions to National Accounts data make it more difficult to compare this to previous forecasts, but the bottom line is that Bank expects modest economic growth in the years ahead, with limited prospects for its acceleration.

Household debt is still growing albeit at a snail’s pace. The Bank expects “the household debt burden is expected to rise further before stabilizing by the end of the projection horizon (2014),” with “housing activity…expected to decline from historically high levels”.

The Bank also recognized that inflation has been softer than it had previously expected, which also suggests that interest rates will rise later than was previously anticipated by financial markets. It said that “core inflation has been lower than expected in recent months, reflecting somewhat softer prices across a wide range of goods and services,” it is expected to increase gradually over coming quarters, reaching 2 per cent by the middle of 2013.

It added that total CPI inflation had fallen “noticeably” below the 2 per cent target, but expected to return to the 2 per cent target by the end of 2013, which is a little later than previously thought.

The bottom line is that economic growth is expected to remain modest but positive, consistent with low inflation and low interest rates. The Bank of Canada made clear its fondest wish is still for an opportunity to hike rates at some point, but has been forced to soften its stance given the weakened prevailing economic outlook.

When the Bank made its policy rate announcement on October 23rd 2012, the advertised five-year lending rate stood at 5.24 per cent. This is where it has stood unchanged since the beginning of June 2012.

The Bank will make its next scheduled rate announcement on December 4th, 2012.

(CREA 10/23/2012)

Ottawa, ON, October 15, 2012 – According to statistics released today by The Canadian Real Estate Association (CREA), national resale housing activity rebounded slightly in September 2012, marking the first monthly increase since the spring.

Highlights:

• Home sales up 2.5% from August to September.
• Actual (not seasonally adjusted) activity down 15.1% from September 2011.
• Number of newly listed homes up 6.5% from August to September.
• Market remains firmly in balanced territory, but conditions have eased.
• National average home price up 1.1% on a year-over-year basis in September.
• The MLS® HPI rose 3.9% in September, its smallest gain since May 2011.

The number of home sales processed through the MLS® Systems of real estate Boards and Associations in Canada rose 2.5 per cent on a month-over-month basis in September 2012. This marks the first monthly gain in activity since March 2012 and a partial recovery from the 6.2 per cent drop recorded in August in the wake of new mortgage rules.

Activity picked up in about 60 per cent of local markets in September, including Greater Vancouver, Calgary, Edmonton, Greater Toronto, and Quebec City.

Actual (not seasonally adjusted) activity nonetheless remained down 15.1 % from year-ago levels, with more than half of all local markets posting declines of at least 10 per cent.

“New mortgage rules continue to keep a lid on national sales activity,” said CREA President Wayne Moen. “That said, national figures mask diverging trends in different markets, with activity down in some places while sales elsewhere remain strong. As always, all real estate is local, so buyers and sellers should talk to their REALTOR® to understand how the housing market is shaping up where they live or might like to.”

“National activity is likely to remain down from year-ago levels over the fourth quarter of 2012,” said Gregory Klump, CREA’s Chief Economist. “In the shadow of the latest mortgage rule changes, activity has ratcheted down from higher levels seen during the fourth quarter last year. While some first time home buyers may no longer qualify for mortgage financing under the new rules, it is likely that many others are stepping back and reassessing how much house they can realistically afford, which is one of the things new mortgage rules were designed to do.”

National sales reached 110,376 units in the third quarter of 2012, down 6.5 per cent from the previous quarter. A total of 366,353 homes have traded hands over Canadian MLS® Systems so far this year, up one per cent from levels reported over the first nine months of 2011.

The number of newly listed homes rebounded by 6.5 per cent in September on a month-over-month basis after declines in each of the previous two months. Led by double-digit gains in Greater Toronto and Greater Vancouver, new supply was up in more than 60 per cent of all local markets in August, including most other large urban centres.

Calgary and Quebec City were the only two large markets where new listings eased in September, with declines of less than two per cent.

With the increase in new listings outstripping the increase in sales activity, the national housing market became further entrenched within balanced market territory in September.

The national sales-to-new listings ratio, a measure of market balance, stood at 49 per cent in September 2012, remaining near the midpoint of a balanced market. Based on a sales-to-new listings ratio of between 40 to 60 per cent, a little less than two thirds of all local markets were in balanced market territory in September.

The number of months of inventory is another important measure of balance between housing supply and demand. It represents the number of months it would take to sell current inventories at the current rate of sales activity. The small monthly rise in national sales activity resulted in a decline in the months of inventory to 6.4 months at the end of September compared to 6.6 months at the end of August. Months of inventory readings declined from the previous month in more than half of all local markets.

The actual (not seasonally adjusted) national average price for homes sold in September 2012 was $355,777, up 1.1 per cent from the same month last year.

The national average price continues to be influenced by compositional factors, most notably by fewer sales in Greater Vancouver this year compared to much stronger levels last year. The result has been a downwardly skewed national average price this year compared to an upwardly skewed average selling price last year.

Excluding Greater Vancouver (which currently accounts for less than five per cent of national activity) from the national average price calculation yields a year-over-year increase of 3.4 per cent, reflecting average sale prices that rose in 70 per cent of all local markets in September 2012.

Unlike average price, the MLS® Home Price Index (MLS® HPI) is not affected by changes in the mix of sales, so it provides the best gauge of Canadian home price trends.

The index tracks home price trends in some of Canada’s most active housing markets, including Greater Vancouver, the Fraser Valley, Calgary, Greater Toronto, and Greater Montreal. The MLS® HPI is also being developed for additional markets whose results will be included in the Aggregate Composite index. Each time an additional market joins the MLS® HPI, the Aggregate Composite index will be revised beginning with January 2005.

This month, Regina joins the Aggregate Composite MLS® HPI.

The Aggregate Composite MLS® HPI rose 3.9 per cent year-over-year in September 2012. This was the fifth time in as many months that the year-over-year gain shrank, and marks the slowest rate of increase since May 2011.

Year-over-year price gains decelerated for all Benchmark property types tracked by the index. The increase was strongest for one-storey single family homes (+5.7 per cent) and two-storey single family homes (+5 per cent). Prices for townhouse and apartment units continue to post more modest gains, rising 1.1 per cent and 1.5 per cent respectively.

The MLS® HPI rose fastest in Regina (14.2% year-over-year), which was the only market covered by the index in which price growth accelerated.

The MLS® HPI also climbed in Calgary (6.5%), Greater Toronto (5.7%), Greater Montreal (2.2%), and the Fraser Valley (2.1%). In Greater Vancouver, the MLS® HPI posted a 0.8 per cent year-over-year decline in September.

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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 neighborhoods 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 106,000 REALTORS® working through more than 100 real estate Boards and Associations.

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

Ottawa, ON, September 17, 2012 – According to statistics released today by The Canadian Real Estate Association (CREA), national resale housing activity dropped sharply from July to August 2012.

Highlights:

• Home sales down 5.8% from July to August.
• Actual (not seasonally adjusted) activity stood 8.9% below levels in August 2011.
• Number of newly listed homes down 1.7% from July to August.
• Housing market remains firmly in balanced territory at the national level.
• National average home price up 0.3% on a year-over-year basis in August.
• The Composite Aggregate Benchmark home price was up 4% in August, its smallest gain in over a year.

The number of home sales processed through the MLS® Systems of real estate Boards and Associations in Canada fell 5.8 per cent between July and August 2012, marking the largest month-over-month decline since June 2010.

Declines were reported in about two-thirds of all local markets representing 80 per cent of national activity, with monthly sales declines in almost all large urban centres, including Greater Toronto, Greater Montreal, Greater Vancouver, the Fraser Valley, Calgary, Edmonton, and Ottawa. (Chart A)

Actual (not seasonally adjusted) activity was down 8.9 per cent in August 2012 compared to the same month last year. This was the biggest year-over-year drop since April 2011.

“While we always caution that housing market trends at the national level can and do run counter to trends in many local markets, the decline in activity in August was definitely the result of much of the country moving in the same direction,” said CREA President Wayne Moen. “That said, many smaller and more affordable markets bucked the national trend. As always, all real estate is local, so buyers and sellers should speak to their REALTOR® to understand how the housing market is shaping up where they live.”

“August’s sales figures will no doubt provide comfort to policymakers, providing the first clear indication that the recent changes to mortgage regulations aimed at cooling the market are working as intended,” said Gregory Klump, CREA’s Chief Economist. “With previous changes to mortgage regulations, demand rose between the time changes were announced and their implementation, and invariably fell in the months immediately after being implemented, before recovering to long-term levels. By contrast, recent changes to mortgage regulations were in force more quickly after being announced, so home buyers had far less time to react. As a result, demand didn’t pick up just before the changes took effect, while sales declined once they did.”

A total of 334,208 homes have traded hands over Canadian MLS® Systems so far this year. This represents a 2.8 per cent increase compared to levels reported over the first eight months of 2011, and a narrowing of the 4.5 per cent lead for year-to-date sales activity in July.

The number of newly listed homes fell 1.7 per cent in August compared to July. New supply was down in just over half of all local markets in August, but the 7.7 per cent month-over-month decrease in Greater Toronto by far contributed most to the national decline.

With the decline in sales activity outstripping the decrease in new listings, the national housing market was more balanced in August than it had been at any other point in the past two years.

The national sales-to-new listings ratio, a measure of market balance, stood at 51 per cent in August 2012, down from 53.1 per cent in July. Based on a sales-to-new listings ratio of between 40 to 60 per cent, about two-thirds of all local markets were in balanced market territory in August.

Another measure of market balance, the national number of months of inventory, stood at 6.5 months at the end of August. This was up from 6.1 months at the end of July, as the measure rose in between July and August in almost two-thirds of all local markets. 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 broadly based decline in August sales activity suggests that some buyers may no longer qualify for a mortgage now that amortization periods for high ratio mortgages have been shortened,” said Klump. “As the lynchpin of the housing market, lower first-time buying activity will have downstream effects over the rest of the market. While we expect it will likely take more time for move-up buyers to sell their current home, a few more months of data are needed to gauge the broader impact of recent regulatory changes on Canada’s housing market.”

The actual (not seasonally adjusted) national average price for homes sold in August 2012 was $350,192, up three-tenths of one per cent from the same month last year.

The national average price continues to be influenced by compositional factors, most notably by fewer sales in Vancouver this year compared to much stronger levels last year. The result has been a downwardly skewed national average price this year compared to an upwardly skewed average selling price last year.

By way of example, excluding just Greater Vancouver from the national average price calculation yields a year-over-year increase of 3.3 per cent, reflecting the fact that average sale prices were actually up year-on-year in three-quarters of all local markets in August.

Unlike average price, the MLS® Home Price Index (MLS® HPI) is not affected by changes in the mix of sales, providing the best gauge of Canadian home price trends. The index tracks home price trends in five of Canada’s most active housing markets, including Greater Vancouver, the Fraser Valley, Calgary, Greater Toronto, and Montreal. These five markets comprise approximately 45 per cent of all home sales activity in Canada.

The MLS® HPI rose four per cent on a year-over-year basis in August 2012. This was the fourth time in as many months that the year-over-year gain shrank, and marks the slowest rate of increase in over a year.

Year-over-year price growth held steady at 5.6 per cent in August for one-storey single family homes while moderating to 5.2 per cent in the two-storey single family Benchmark housing category.

Prices for townhouse and apartment units continue to see more modest gains, rising 1.7 per cent and 1.8 per cent respectively on a year-over-year basis in August 2012. These were also smaller gains than were seen in July.

The MLS® HPI posted the largest year-over-year increase in Calgary (6.5%), followed by Greater Toronto (6.3%), the Fraser Valley (2.5%), and Montreal (2.2%). In Greater Vancouver, the MLS® HPI posted its first albeit marginal year-over-year decline (-0.5%) in almost three years.

Ottawa, ON, September 17, 2012 – The Canadian Real Estate Association (CREA) has updated its forecast for home sales activity via the Multiple Listing Service® (MLS®) Systems of Canadian real estate Boards and Associations in 2012 and 2013.

Since CREA’s last resale housing forecast, mortgage regulations were tightened further, activity in Ontario softened, and the slowdown of sales activity in British Columbia deepened. As a result of these developments, CREA has lowered its forecast for Canadian home sales this year and next. The national average price forecast has also been reduced, reflecting an expected decrease in Ontario’s and British Columbia’s provincial sales as a proportion of national activity.

British Columbia’s share of national sales has declined further below its long term average.

Ontario’s share of national sales has also retreated from elevated levels, and is expected to hold near its long run average.

National resale housing activity is now forecast to rise by 1.9 per cent to 466,900 units in 2012. Alberta is still expected to post the biggest increase in activity, offsetting a sales decline in British Columbia.

In 2013, CREA forecasts that national sales activity will recede by 1.9 per cent to 457,800 units. This is a larger decline than was previously forecast, reflecting the cumulative effects of previous and recent changes to mortgage regulations, and anticipated interest rate increases in the second half of 2013. Activity is expected to ease in all provinces except Alberta and Manitoba, with Ontario registering the largest decline.

Although revised downward, national sales in 2012 and 2013 are forecast to remain roughly on par with the 10 year average, with 2012 coming in slightly above and 2013 slightly below average.

“All real estate is local, so housing market prospects can and do differ among regions and communities,” said Wayne Moen, CREA President. “For that reason, buyers and sellers should talk to their REALTOR® about the housing market outlook where they live.”

The national average home price is forecast to rise by just 0.6 per cent to $365,000 in 2012, reflecting a strong start to the year for sales and average price in Ontario but fewer expensive home sales in British Columbia.

The national average price is expected to edge lower by one tenth of one per cent to $364,500 in 2013, with Ontario and British Columbia registering small price declines amid modest average price gains in other provinces.

“Recent changes to mortgage regulations are likely to sideline some potential first-time home buyers, particularly in some of Canada’s priciest housing markets,” said Gregory Klump, CREA’s Chief Economist. “That’s likely to result in slower momentum for resale housing activity, with an increase in the amount of time it takes for move-up buyers to sell their current home. Job growth is widely expected to continue at a modest pace while interest rates remain on hold, so the economic outlook is absent the factors that typically result in forced sales and a dramatic swing in prices.”

The Bank of Canada kept its key policy rate at 1 per cent on September 5^th, 2012, where it has been held steady for two years. This marks the longest period since the 1950s that rates have been left unchanged.

The text accompanying the announcement was little changed from the July statement. This includes the bottom line that the Bank would still like its next move to be a rate hike, but that the timing and degree and any such decision would depend on whether global and domestic trends play out as expected in the months ahead.

Although the Bank expects the economic outlook to brighten, it identified a number of downside risks that may force it to lower its expectations. Among these risks are “widespread slowing of activity across advanced and emerging economies,”  recognition that “Europe is in recession and its crisis, while contained, remains acute.” It also reiterated that economic growth in China and other emerging economies is braking a little bit harder than it had previously expected. It also noted that economic growth in the United States was continuing at a “gradual pace”.

While these factors are consistent with the continuation of low inflation and low interest rates, it also recognized that prices for oil and many other commodities that Canada exports have increased from lower levels this summer. While that means prices at the gas pump have prevented consumer price inflation from edging lower, it also leaves less money in household budgets for discretionary spending, thereby keeping spending and growth in check.

Spurred on by the continuation of near-record low interest rates, consumption and business investment are expected to be the primary drivers of growth next year. That said, while business investment remains solid, the Bank acknowledged “tentative signs of slowing in household spending, although the household debt burden continues to rise.” This suggests that the Bank remains worried about growth in consumer debt, even while growth in household debt has slowed to a crawl.

The Bank said that core inflation had been softer than expected in recent months, but added that with the economy operating near its production potential, both core and total CPI inflation were expected to return to their two per cent targets over the next 12 months.

The bottom line was unchanged for a fourth time since the April announcement, in saying that “some modest withdrawal of the present considerable monetary policy stimulus may become appropriate” based on how global and domestic trends, and risks, play out in the months ahead.

So even as the global economic picture continues to dim, and other major central banks talk of renewed stimulus, the Bank of Canada still feels its next move should be  a rate hike. Financial markets are currently pricing in the possibility of quarter point interest rate hike next April, but a lot can change between then and now.

As of September 5^th 2012, the advertised five-year lending rate stood at 5.24 per cent. It has been unchanged at this level since the beginning of June.

The Bank will make its next scheduled rate announcement on October 23^rd, 2012.

(CREA 09/05/2012)

Ottawa, ON, August 15, 2012 – According to statistics released today by The Canadian Real Estate Association (CREA), national resale housing activity remained stable from June to July 2012. Prices are off their recent peaks in Greater Vancouver and Greater Toronto, but remain above year-ago levels in most markets.

Highlights:

• Home sales activity little changed (-0.01%) from June to July.
• Actual (not seasonally adjusted) sales up 3.3% over levels in July 2011.
• The number of newly listed homes fell 3.3% from June to July.
• Stable sales combined with fewer new listings firmed the national housing market, keeping it in balanced market territory.
• The national average home price declined 2.0% on a year-over-year basis in July.
• The Composite Aggregate Benchmark home price was up 4.5% in July, its smallest gain in over a year.

Sales over MLS® Systems of Canadian real estate Boards and Associations held steady in July 2012 from the previous month, edging back by less than one-tenth of a percentage point.

The number of local housing markets was roughly evenly split between those that saw month-over-month gains and those that posted monthly declines. Activity was up from the previous month in Kingston, Chilliwack, and Calgary, offset by fewer sales in Toronto, Newfoundland & Labrador, and Edmonton.

Actual (not seasonally adjusted) activity was up 3.3 per cent year-over-year in July 2012, with gains in Calgary and slower sales in Vancouver.

“Recent changes to mortgage regulations were widely expected to temper sales and prices in Greater Toronto and Greater Vancouver, and the data released today confirms that,” said Wayne Moen, CREA President. “Even so, sales and price trends can be very different from one market to the next, and run counter to national trends. Buyers and sellers should talk to their REALTOR® to understand how the housing market is shaping up in their area.”

“Some first-time home buyers may have difficulty qualifying for mortgage financing due to shortened amortization periods included in recent changes to mortgage regulations,” said Gregory Klump, CREA’s Chief Economist “As the lynchpin of the housing market, lower first-time buying activity will have knock-on effects over the rest of the market. It will likely take more time for move-up buyers to sell their current home.”

The number of newly listed homes fell 3.3 per cent in July compared to June, with declines in more than half of all local markets including Montreal, Toronto, Vancouver, the Fraser Valley, Calgary, and Edmonton.

The national housing market remains firmly entrenched in balanced market territory, supported by stable sales activity and fewer new listings. The national sales-to-new listings ratio, a measure of market balance, stood at 53.4 per cent in July 2012, up from 51.6 per cent in June. Based on a sales-to-new listings ratio of between 40 to 60 per cent, two thirds of all local housing markets were in balanced market territory in July.

The national number of months of inventory is another measure of market balance. It represents the number of months it would take to sell current inventories at the current rate of sales activity. It stood at 6.1 months at the end of July, unchanged from the June reading. The months of inventory measure has been hovering around six months since the end of 2010.

Average sale prices in July were up from levels one year ago in about seven of every 10 local markets, but declining sales activity in Greater Vancouver continues to impact the national average price. The actual (not seasonally adjusted) national average price for homes sold in July 2012 was $353,147, down two per cent from the same month last year. Excluding Greater Vancouver from the national average price calculation yields a year-over-year increase of 1.1 per cent.

Unlike average price, the MLS® Home Price Index (MLS® HPI) is not affected by changes in the mix of sales, so it provides a better gauge of Canadian home price trends. The index tracks home price trends in five of Canada’s most active housing markets, including Greater Vancouver, the Fraser Valley, Calgary, Greater Toronto, and Montreal. These five markets comprise approximately 45 per cent of all home sales activity in Canada.

The MLS® HPI rose 4.5 per cent year-over-year in July 2012. This was the third time in as many months that the year-over-year gain shrank, and marks the slowest rate of increase in over a year.

Year-over-year gains moderated in all Benchmark housing categories tracked by the index. One and two-storey single family homes posted the strongest year-over-year growth in July, with two-storey single family home prices up 5.8 per cent and one-storey single family prices up 5.6 per cent.

Prices for townhouse and apartment units continue to see more modest gains, rising 2.5 per cent and 2.2 per cent respectively on a year-over-year basis in July 2012.

The MLS® HPI posted the largest year-over-year increase in Greater Toronto (7.1%), followed by Calgary (6.0%), the Fraser Valley (2.5%), Montreal (2.1%), and Greater Vancouver (0.6%). Price gains in July were smaller than they were the previous month in all of these markets except Calgary.