Canadian home sales ended 2019 on a strong note, jumping 22.7% in December from the same month in 2018, according to the latest report from the Canadian Real Estate Association (CREA).
While this means the market is well on the road to long-term recovery, it did experience some seasonal slippage, with sales down 0.9% month over month, ending a streak of monthly gains that began in March. And, while transaction levels are 18% above the six-year low reached in February 2019, they are still 7% below the peak recorded in 2016 and 2017.
“There was an almost even split between the number of local markets where activity rose and those where it declined, with higher sales in the Lower Mainland of British Columbia, Calgary and Montreal offsetting declines in the Greater Toronto Area (GTA) and Ottawa,” CREA reports.
The Supply-and-Demand Gap Will Be an Issue in 2020
Still, sales are still far, far outpacing new and active listings, which is deepening the supply-and-demand gap and will likely drive prices even higher in 2020.
The national sales-to-new listings ratio indicates steep sellers’ conditions — at 66.9% it’s the highest it’s been in 15 years, reports CREA, and well above the long-term average of 53.7%. Essentially, demand is outstripping supply sales and the market is becoming much more competitive for buyers.
“Based on a comparison of the sales-to-new listings ratio with the long-term average, just over half of all local markets were in balanced market territory in December 2019,” CREA reports.
Based on this measure, Vancouver can still be considered balanced, while Toronto, Montreal and the Maritime provinces are tilted toward seller-friendly conditions. The Prairies, however, remain in buyers’ markets, and are one of the few remaining places in the country to have an oversupply of housing.
Ontario is Canada’s Leader in Home Price Growth
Property prices are already rising faster than inflation, with benchmark prices growing 3.4% year over year to $643,700 in the 19 markets CREA tracks.
Ontario is leading the country with price growth, and all markets tracked by CREA are posting significant gains.
Toronto prices rose 6.9% year over
Montreal (+9.29%) and Moncton (+4.95%) also posted gains, while Calgary, Edmonton and Saskatoon prices dropped between around 1% to 2%.
British Columbia was a mixed bag, with Vancouver declining 3.19%, but smaller regions, such as the Okanagan Valley (+4.2%), Victoria (+2.3%) and Vancouver Island (+4.2%) gaining.
Check out the infographic below for Canada’s December housing market.
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