CREA News

OTTAWA – April 27th, 2012 – The MLS® Home Price Index (HPI), the leading measure of Canadian home prices, stayed above year-ago levels in March 2012 according to statistics released today by The Canadian Real Estate Association (CREA). Year-over-year gains have been moderating. The increase in March was the smallest since last June.

Highlights:

• The Aggregate Composite MLS® Home Price Index in March 2012 was up 5.1% year-over-year – on par with the gain in February and the smallest increase since June 2011.
• Toronto posted the largest year-over-year increase (7.3%), followed by Vancouver (5.3%), the Fraser Valley (3.3%), Calgary (2.6%), and Montreal (2.2%).
• Year-over-year gains were largest for one-and two-storey single family homes, which rose 5.4% and 6.8% respectively. Apartment prices climbed 3%, and townhouse prices were up 2.6%.

The MLS® Home Price Index rose 5.1 per cent in March 2012 compared to the same month last year. The increase was on par with February’s gain, which was the smallest since last June.

“Overall price trends show that Canada’s housing market continues to moderate,” said Wayne Moen, CREA President. “Price increases have been shrinking since last fall. While that trend paused in March, it may in part reflect an early spring in many parts of the country, resulting in increased competition among buyers. That said, headline numbers mask some important differences in price trends among local housing markets and housing types. Since all real estate is local, buyers and sellers should talk to their local REALTOR® to best understand how home price trends are shaping up where they live.”

The MLS® HPI remained above its year-ago level in all five of the markets tracked, led by Toronto (7.3%).

It also held above year-ago levels in all housing categories tracked, led by two-storey single family homes (6.8%).

The MLS® HPI rose 1.3 per cent from to February to March 2012.

“The index typically experiences these types of month-over-month gains in the spring, which coincides with when the balance of supply to demand is tightest,” said Gregory Klump, CREA’s Chief Economist. “With that in mind, it’s important to look at month-to-month movements in the context of how they compare to the same period in previous years. While the overall monthly price increase was on par with last year’s figure, it masks slowing price momentum in the Lower Mainland area of British Columbia. Slower price gains there were offset in March by a modest acceleration of price gains in Calgary, Toronto, and Montreal.”

MLS® Home Price Index

January 2005 = 100

percentage change vs.

 Composite HPI:

March 2012

1 month ago

3 months ago

6 months ago

12 months ago

3 years ago

5 years ago

Aggregate

     152.9

1.33

2.62

2.48

5.09

21.45

18.71

Lower Mainland

     155.7

1.04

1.90

0.97

4.78

21.45

16.89

Greater Vancouver

     161.8

1.06

2.08

1.00

5.27

25.91

22.02

Fraser Valley

     142.2

0.92

1.50

1.07

3.34

11.44

5.72

Calgary

     172.3

1.41

2.38

1.95

2.62

7.69

-6.26

Greater Toronto

     147.6

1.65

3.14

3.94

7.35

30.74

31.79

Greater Montreal

     150.3

1.49

2.80

1.28

2.18

17.06

30.02

 

Interactive tables and charts for MLS® Home Price Index data on Composite, Single family homes (including separate indices for one- and two-storey homes), Townhouse/row units, and Apartment units are available at www.homepriceindex.ca/hpi_tool_en.html.

Data table available to media upon request, for purposes of reprinting only.  

In focus: Some of the trends underlying the overall MLS® HPI

Momentum in the overall MLS® HPI held steady between February and March 2012, with equal year-over-year gains of 5.1 per cent. However, because the MLS® HPI is composed of four Benchmark housing types and more than 1,600 sub-areas spread among five housing markets, the overall index can mask price trend variations among Benchmark housing categories within a single housing market and between different parts of the country.

Price gains for two-storey single family homes have surpassed this in other housing categories since the beginning of the economic recovery. Despite a recent deceleration in gains, two-storey single family homes posted the strongest year-over-year price gains in March. By contrast, price gains for one-storey single family homes picked up in March, which was driven mainly by increases in Montreal and Toronto.

Price growth remains much stronger for one-and two-storey single family homes compared to multi-family units, with price gains for single family homes (6.4%) running roughly double that for townhouse units (2.6%) or apartment units (3.0%). Even so, there are significant differences between housing markets.

In Montreal, townhouse unit prices are rising faster than prices for other housing types. This likely reflects the desirability of their location, since townhouse units are predominantly centrally located while single family homes are often located further from Montreal’s city centre.

Price gains have remained strongest in Toronto since mid-2011. The rise in Toronto’s Composite MLS® HPI was a full two per cent above the year-over-year increase in Vancouver’s composite index. This represents the largest spread for price growth between these two markets in more than a year. This gap may widen further, since the Vancouver market is showing signs of coming off the boil while a lack of available supply relative to demand keeps Toronto’s housing market in seller’s market territory.

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.

The Bank of Canada kept its trend-setting Bank Rate at 1.25 per cent on April 17th, 2012. While this was the 13th consecutive policy meeting in which borrowing costs have been left unchanged, it was the first time since last September that a policy announcement has included a reference to the possibility of a rate hike.

The Bank reiterated a number of the more positive developments it first mentioned in the March 8th announcement. These include a stronger profile for U.S. economic growth, as well as reduced risk emanating from Europe, which the Bank now expects will “emerge slowly from recession in the second half of 2012.”

The Bank also noted that “improved global economic prospects, supply disruptions and geopolitical risks,” are keeping oil prices up which if sustained could prove a risk to the improvement in economic momentum.

In Canada the Bank again declared the biggest risk to be high household debt, adding that it expects households will continue to add to their debt burden as “private domestic demand will account for almost all of Canada’s economic growth over the projection horizon.”

That said, with economic momentum in Canada remaining firmer than the Bank had expected back in January, the forecast for growth this year has been lifted. The Bank now expects the economy will grow at 2.4 per cent this year, up from the 2.0 per cent forecast in January.

At the same time, the Bank lowered its forecast for 2013 to 2.4 per cent from 2.8 per cent, and also extended its forecast out to 2014 with a prediction of 2.2 per cent growth.

The Bank also noted that the amount of slack in the economy had decreased. As such, the Bank now expects the economy will return to full capacity “in the first half of 2013,” which while intentionally vague is still sooner than the previous prediction for a return to full capacity by the third quarter of next year.

The Bank ended the announcement by hinting, for the first time since last September, that it may have to raise rates, stating “In light of the reduced slack in the economy and firmer underlying inflation, some modest withdrawal of the present considerable monetary policy stimulus may become appropriate, consistent with achieving the 2 per cent inflation target over the medium term. The timing and degree of any such withdrawal will be weighed carefully against domestic and global economic developments.”

Further clarification as to when these “modest” rate hikes may be expected will no doubt be the subject of the various speeches and remarks given by the Governor and his deputies between now and the next announcement on June 5th, 2012.

As of April 17th 2012, the advertised five-year lending rate stood at 5.44 per cent. This is up 0.2 percentage points from 5.24 per cent on March 8th, when the Bank made its previous policy interest rate announcement.

(CREA 04/17/2012)

OTTAWA – April 16, 2012 – According to statistics released today by The Canadian Real Estate Association (CREA), national resale housing activity edged higher in March 2012.

Highlights:

• Home sales rose 2.5% from February to March.
• Actual (not seasonally adjusted) activity stood 1.6% above levels in March 2011, the smallest year-over-year increase since last April.
• The number of newly listed homes eased 0.3% from February to March.
• While still well balanced, the national housing market tightened due to the rise in activity.
• The national average home price edged down 0.5% on a year-over-year basis in March.

Sales activity over MLS® Systems of Canadian real estate Boards and Associations rose 2.5 per cent from February to March 2012. The increase lifted national activity to its highest monthly level since April 2010.

Activity in March was up from the previous month in two-thirds of all local markets, with Toronto, Calgary, and Edmonton contributing most to the national increase.

Actual (not seasonally adjusted) activity stood 1.6 per cent above levels in March 2011, the smallest year-over-year increase since last April. It reflects moderate gains in a number of major centres, including Toronto, Calgary, Montreal, Ottawa, and Quebec City. Increases in these housing markets offset larger declines in Vancouver and the Fraser Valley, where activity last year ran at unusually strong levels.

A total of 108,373 homes traded hands in the first three months of the year. This is 5.0 per cent above the five-year average for first quarter sales, 3.8 per cent above the 10-year average, and 4.4 per cent above activity in the first quarter of 2011.

New listings were little changed following their uptick in February, having edged lower by 0.3 per cent on a month-over-month basis in March. The number of newly listed homes declined from the previous month in just over half of all local Canadian housing markets, and rose in almost all of the remainder.

“The spring housing market is off to a good start,” said Wayne Moen, CREA’s President. “The number of sales and newly listed properties are up from levels last year, and the vast majority of housing markets remain balanced. That said, all housing is local, so buyers and sellers should talk to their local REALTOR® to understand current and prospective trends where they live.”

The national housing market remains well balanced, although the monthly increase in sales activity caused the balance between supply and demand to tighten slightly.

The national sales-to-new listings ratio, a measure of market balance, stood at 55.1 per cent in March. This remains firmly in balanced market territory, but is up from 53.6 per cent in February. Based on a ratio of between 40 and 60 per cent, more than half of local markets were balanced in March.

The number of months of inventory stood at 5.7 at the end of March on a national basis, down slightly from 5.8 months in February. 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 another measure of the balance between housing supply and demand.

The actual (not seasonally adjusted) national average price for homes sold in March 2012 was $369,677, representing a decline of one half of a percentage point from the same month last year.

“Average prices are up from year-ago levels in most large urban centres,” said Gregory Klump, CREA’s Chief Economist. “The slight decline in the national average price points to a tug of war between Toronto and Vancouver from the standpoint of their sales mix compared to last year.”

“The national average price was skewed higher last spring by record level high-end home sales in some of Vancouver’s priciest neighbourhoods. It was expected that this would not recur this spring, which the latest sales figures confirm. The decline in average price reflects the change in Vancouver’s sales mix, not housing price deflation.”

“At the same time, overall home sales activity in Toronto is stronger than it was last spring, and higher-end home sales are up from year-ago levels. Being by far the most active housing market in Canada, Toronto represents the single biggest factor supporting national average price compared to last year.”

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

Further information can be found at http://www.crea.ca/public/news_stats/media.htm.

OTTAWA – March 23rd, 2012 – The MLS® Home Price Index1, the leading measure of Canadian home prices, continued rising in February 2012, according to statistics released today by The Canadian Real Estate Association (CREA). Year-over-year comparisons continued shrinking, providing further evidence that Canadian home price growth may be topping out.

Highlights:

• The Aggregate Composite MLS® Home Price Index in February 2012 was up 5.1% from its year-ago level, the smallest increase since June 2011.
• Toronto posted the largest increase (7.3%), but momentum continued fading. Price increases also moderated further in Calgary (2.5%) and Montreal (1.6%).
• Gains decelerated in all housing categories tracked except 2-storey single family homes.
• The Aggregate Composite MLS® Home Price Index rose 1.1% on a month-over-month basis in February 2012.
• Prices were up most for 2-storey single family homes (1.6%), while townhouse/row and apartment units saw smaller gains (0.4% & 0.5% respectively).

The MLS® Home Price Index in February 2012 was up 5.1 per cent from levels in February 2011. The increase was the smallest since last June, and marked the fourth consecutive month in which gains slowed.

“MLS® HPI trends for February show that home price growth is generally slowing,” said Gary Morse, CREA President. “At the same time, price gains and trends differ among housing markets tracked by the index. Since all real estate is local, buyers and sellers should talk to their local REALTOR® to best understand how home price trends are shaping up where they live.”

The MLS® HPI remained above its year-ago level in all five of the markets tracked, led by Toronto (7.3 per cent). It also remains above year-ago levels in all housing categories tracked, led by two-storey single family homes (6.9%).

The MLS® Home Price Index rose 1.1 per cent in February 2012 as compared to January.

“The index typically rises in February from the previous month as demand ramps up leading into the spring housing market,” said Gregory Klump, CREA’s Chief Economist. “The monthly price increase in February this year was less than what we saw in either of the past two years, which is more evidence that the trend for Canadian home prices is slowing.”

Among housing categories tracked by the index, single family homes posted the biggest month-over-month gains in most markets, particularly in Toronto where they are in short supply relative to strong demand.

In focus: the condo apartment market

Interest in the market for condo apartment units has increased recently, particularly Toronto’s condo market. With Toronto’s year-over-year increase in the MLS® HPI for apartment units (4%) having surpassed gains in other major Canadian condo markets in February 2012, it is likely that Toronto’s condo market will remain of particular interest.

The MLS® HPI shows that price gains are decelerating for condos in Toronto. In other markets, year-over-year price gains for condo apartment units are near the overall rate of consumer price inflation. This suggests that the condo market is not overheating.

A number of new condominium apartment projects have been completed in the GTA over the past year. Some of these new units have been listed for sale, resulting in a better supplied market. The number of months of inventory for condo units in the GTA on the Toronto Real Estate Board’s MLS® System is running close to its long term average. This suggests the GTA condo market is balanced, which is consistent with moderate price growth.

The number of condo developments slated for completion annually is unlikely to result in a glut of supply relative to demand and consequent price correction. Barring an unexpected spike in interest rates, economic downturn or overly restrictive further changes to mortgage regulations, the condominium apartment market is likely to remain balanced for the foreseeable future.

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://www.crea.ca/public/news_stats/media.htm.

1The MLS® Home Price Index is based on single family, townhouse/row unit, and apartment unit sales activity in Greater Vancouver, Fraser Valley, Calgary, Greater Montreal, and Greater Toronto.

OTTAWA – March 15, 2012 – According to statistics released today by The Canadian Real Estate Association (CREA), national resale housing activity improved in February 2012 after having declined in January.

Highlights:

• Home sales rose 1.4% from January to February.
• Actual (not seasonally adjusted) activity was up 8.6% from February 2011 levels.
• The number of newly listed homes climbed 1.9% from January to February.
• The national sales-to-new listings ratio was little changed, remaining firmly in balanced territory.
• The national average home price advanced 2.0% on a year-over-year basis in February.

Sales activity recorded through the MLS® Systems of Canadian real estate Boards and Associations edged up 1.4 per cent from January to February 2012, recouping one-third of the monthly decline in activity between December 2011 and January 2012.

Activity was up on a month-over-month basis in half of all local markets in February, led by Calgary, Toronto, Barrie, Montreal, Quebec City, Saint John, and Halifax-Dartmouth.

Actual (not seasonally adjusted) activity was up 8.6 per cent on a year-over-year basis in February. A total of 61,772 homes traded hands in the first two months of 2012, up 6.7 per cent from the same period in 2011.

The number of newly listed homes also rebounded 1.9 per cent on a month-over-month basis in February, reaching the highest level since May 2010. A rebound in new listings in Toronto and Montreal, Canada’s two most active markets, offset a retreat in new listings in Vancouver, Canada’s third largest market.

With both sales and new listings having risen, the national sales-to-new listings ratio, a measure of market balance, was little changed in February (53.3 per cent) compared to January (53.6 per cent) and remains firmly in balanced market territory.

“The national rise in both sales activity and the number of newly listed homes beyond the normal seasonal increase provides clear evidence that Canadians are confident in housing market prospects,” said Gary Morse, CREA’s President. “Confidence varies by region, as do prospects for housing demand. For that reason, buyers and sellers should talk to their local REALTOR® to understand current and prospective trends in their local housing market.”

“It is important to remember that MLS® home sales and purchases are a significant source of economic activity and job creation. Total consumer spin-off spending resulting from MLS® home sales and purchases will add an estimated $19.4B to the economy, and create over 159,000 jobs in 2012,” continued Morse.

Based on a sales-to-new listings ratio of between 40 to 60 per cent, 60 per cent of local markets were balanced in February. Compared to the previous month, there were more buyers’ markets and fewer sellers’ markets.

The number of months of inventory stood at 5.9 months at the end of February on a national basis, unchanged from levels reported in January. 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 another measure of the balance between housing supply and demand.

The actual (not seasonally adjusted) national average price for homes sold in February 2012 was $372,763, up two per cent from its reading for the same month last year.

“In February 2011, the national average price was stretched upward by a spike in high-end home sales in some of Vancouver’s priciest neighbourhoods, and a replay of that was not expected this year,” said Gregory Klump, CREA’s Chief Economist. “February’s data bear this out, but other factors are now keeping the national average price aloft. The main one is the housing market in Toronto, where a tight balance between supply and demand continues to drive some of the strongest home price gains in the country, particularly for single detached properties.”

There has been a preference in recent months, in Toronto and other markets, for single family homes which are typically more expensive. This trend held in February, putting additional upward pressure on the national average home price.

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

Further information can be found at http://www.crea.ca/public/news_stats/media.htm.

 

The Bank of Canada kept its trend-setting Bank Rate at 1.25 per cent on March 8th, 2012. This marks the 12th consecutive policy meeting in which borrowing costs have been left unchanged.

The Bank said that the heightened uncertainty around the global economic outlook had decreased in the weeks since the Bank released its January Monetary Policy Report (MPR).

That said, the global economy is still expected to grow at a pace below its long-term average owing to deleveraging in advanced economies.

The Bank noted that U.S. growth was proceeding at a modest pace amid recent signs of life in the labour market, and that while Chain’s economy was slowing, its rate of growth is still high; however, commodity prices are currently higher than anticipated.

Specifically, the price of oil has been pushed higher by recent geo-political concerns. The Bank warned that if sustained, higher oil prices could ultimately dampen the aforementioned improvement in global economic momentum.

Focusing in on the Canadian economy, the Bank said that the outlook for the Canadian economy had improved, though only marginally, from the January MPR. The Bank expects Canadian household spending to remain high as households add to their debt burden. This was characterized as the biggest domestic risk to the outlook.

Net exports have seen some improvement from increased U.S. demand, although they are still being held in check by the persistent strength of the Canadian dollar.

The Bank said that inflation had been higher than previously expected owing to reduced slack in the economy and higher oil prices. That said, inflation is still expected to moderate in the second quarter of the year before returning to its two per cent target for the remainder of the forecast horizon.

“Financial markets still expect interest rates to be hold until well into next year, and today’s announcement confirms the Bank is perfectly happy to sit on the sidelines, and is no closer to raising rates now than it was in January,” said CREA Chief Economist Gregory Klump.

As of March 8th, 2012, the advertised five-year lending rate stood at 5.24 per cent. This is down 0.05 percentage points from 5.29 per cent on January 17th, when the Bank made its last policy interest rate announcement.

The Bank will make its next scheduled rate announcement on April 17th, 2012.

http://creastats.crea.ca/natl/interest_rate_trends.htm

(CREA 03/08/2012)

OTTAWA – March 5 2012 – The Canadian Real Estate Association (CREA) has updated its quarterly forecast for home sales activity via the Multiple Listing Service® (MLS®) Systems of Canadian real estate Boards and Associations in 2012, and extended it to 2013.

National home sales activity for 2012 and 2013 is projected to remain roughly on par with the 10 year average for annual activity, as interest rates remain low and further economic and job growth continue to support Canada’s housing market.

National resale housing activity is forecast to reach 458,800 units in 2012, representing an annual increase of 0.3 per cent compared to 457,305 sales in 2011. Rising demand in Alberta, Saskatchewan, and Nova Scotia, is expected to offset softer activity in British Columbia, Ontario, and New Brunswick.

“The continuation of low interest rates is good news for housing and for the economy,” said Gary Morse, CREA’s President. “Local housing market outlooks differ according to their respective economic prospects, so buyers and sellers should talk to their local REALTOR® to better understand housing market prospects in their area.”

In 2013, national sales are forecast to ebb by 0.3 per cent to 457,200 units, with modest gains in all provinces except Ontario as economic and job growth picks up later this year and builds into 2013.

Multi-million dollar sales activity in Vancouver caused the national average price to temporarily spike in early 2011. This phenomenon is not expected to recur in 2012. As a result, while prices are projected to hold steady near current levels, the national average price is forecast to dip by 1.1 per cent in 2012 to $359,100. Prices are expected to rise modestly in 2013, with the national average inching upward 0.9 per cent to $362,300 at the national level.

“CREA’s updated housing market forecast reflects recent & prospective trends for provincial home sales activity coupled with prevailing provincial economic outlooks,” said Gregory Klump, CREA’s Chief Economist. “Risks to the Canadian economic outlook remain elevated owing to the European sovereign debt quagmire, but the continuation of low interest rates is the silver lining. So long as the European debt crisis is contained and a global economic recession avoided, low interest rates will support Canadian home sales and prices. Recent trends are reassuring, but interest rates remaining low for longer will doubtless keep the Canadian housing market under scrutiny for signs of overheating.”

* Provincial weighted average price for Quebec; does not affect unweighted national average price calculations. Information on Quebec’s weighted average price calculation can be found at: http://www.fciq.ca/immobilier-statistiques-definitions.php

About The Canadian Real Estate Association

The Canadian Real Estate Association (CREA) is one of Canada’s largest single-industry trade associations, representing more than 100,000 real estate Brokers/agents and salespeople working through more than 100 real estate Boards and Associations.

OTTAWA – February 15, 2012 – According to statistics released today by The Canadian Real Estate Association (CREA), national resale housing activity retreated in January 2012 from the strong finish reported for December 2011.

Highlights:

• Home sales were down 4.5% from December to January.
• Actual (not seasonally adjusted) activity came in 4.0% above levels in January 2011, and stood even with the 5 and 10 year averages for January sales.
• The number of newly listed homes edged down 1.4% from December to January.
• With sales down by more than new listings, the national market shifted further into balanced territory.
• The national average home price was up less than 2% year-over-year in January, ranking it among the smallest increases of the past year.

Sales activity recorded through the MLS® Systems of real estate Boards and Associations in Canada fell 4.5 per cent from December 2011 to January 2012. This marks the first monthly decline in national activity since August 2011 and the biggest monthly decline since July 2010. The monthly decline reversed a string of monthly increases over the closing months of last year, and returned national activity to where it stood at the end of the third quarter of 2011.

“The national housing market is stabilizing and remains well balanced,” said Gary Morse, CREA’s President. “That said, forecasts for economic and job growth going forward vary widely for different parts of the country, suggesting a possible continuation of a softening trend in some markets, as well as the potential that demand will pick up based on strong fundamentals in others. All real estate is local, so talk to your local REALTOR® to understand how price trends in your neighbourhood are shaping up.”

Activity was down in over half of all local markets in January from the previous month. Led by declines in Greater Toronto and Montréal, demand also softened in a number of other major urban centres including the Fraser Valley, Calgary, Edmonton, Winnipeg, Ottawa, and Greater Vancouver.

Actual (not seasonally adjusted) national sales activity was up four per cent from year-ago levels in January, the smallest year-over-year increase since last May. As was the case in a number of months last year, actual sales in January 2012 stood close to the five and ten year average for the month.

The number of newly listed homes edged down 1.4 per cent on a month-over-month basis in January following a 2.9 per cent increase in December. The monthly decline in new supply reflects a drop in new listings in a number of Canada’s largest urban centres, which offset a jump in new listings in Vancouver.

Sales fell in January shifting the national market back towards the mid-point of balanced territory and reversing the recent trend which had seen the market becoming tighter over the final four months of 2011. The national sales-to-new listings ratio, a measure of market balance, stood at 53.8 per cent in January, down from 55.5 per cent in December and 55.4 per cent in November.

Based on a sales-to-new listings ratio of between 40 to 60 per cent, 60 per cent of local markets were balanced in January. Compared to December, there were fewer buyers’ and sellers’ markets, and a greater number of balanced markets.

The number of months of inventory stood at six months at the end of January on a national basis, up from 5.7 months in December 2011 and returning it to where it stood in October 2011. 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 another measure of the balance between housing supply and demand.

The actual (not seasonally adjusted) national average price for homes sold in January 2012 was $348,178, representing an increase of 1.2 per cent from its year-ago level. This ranks among the smallest increases since late 2010.

On a seasonally adjusted basis, the national average home price rose 1.6 per cent on a month-over-month basis, marking a rebound from a decline of similar magnitude in December. This pattern mirrors the one playing out in the newly-launched MLS® Home Price Index (HPI), published on February 6.

“Year-over-year comparisons in the national average price are expected to become volatile and may turn negative, reflecting average price developments in the first half of 2011 in Vancouver,” said Gregory Klump, CREA’s Chief Economist. “At that time, high-end home sales in Vancouver’s priciest neighbourhoods surged to all-time record levels, which skewed the national average price upward considerably. A replay of this phenomenon is not expected this year. As a result, comparisons for national average price to year-ago levels over the coming months will reflect an upwardly skewed base effect. For this reason, year-over-year comparisons should be kept in perspective. Developments in the MLS® HPI will provide important guidance on price trends, since it is not affected by the problem of compositional shifts in the mix of sales activity.”

The MLS® HPI also takes into account the contributions toward the price of a home made by a broad range of quantitative and qualitative housing features, allowing it to track Canadian home price trends better than any other measure.

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

Further information can be found at http://www.crea.ca/public/news_stats/media.htm.

The Bank of Canada kept its trend-setting Bank Rate at 1.25 per cent on January 17th, 2012. This marks the 11th consecutive policy meeting in which borrowing costs have been left unchanged.

While recognizing that the outlook for the global economy had deteriorated and that uncertainty had increased since it released its October Monetary Policy Report (MPR), the Bank also made those same observations at its previous meeting on December 6th.

Economic growth in Canada had more momentum in the second half of 2011 than the Bank projected in its October MPR, but it expects the pace going forward to slow by more modest than previously expected, due largely to factors outside Canadian borders. This reiterates statements made in December 2011. On the upside, the Bank said that “very favourable financing conditions are expected to buttress consumer spending and housing activity.”

The Bank releases its updated forecast for Canadian economic growth. It now estimates that the economy grew by 2.4 per cent in 2011 compared to the initial estimate of 2.1 per cent, owing to the better than expected end to the year.

The Bank projects growth of 2.0 per cent in 2012 compared to 1.9 per cent in the October MPR, and 2.8 per cent in 2013, down slightly from the previous 2013 forecast of 2.9 per cent, with the big picture being that past and current growth estimates have been revised upward at the expense of future economic growth.

“The Bank said it expects the pace of growth going forward to moderate by more than initially thought, but the forecast for growth this year has actually been raised slightly,” said CREA Chief Economist Gregory Klump. “That reflects a weaker than previously expected growth profile for the first half of 2012, followed by an acceleration in the second half of the year.”

“The Bank reiterated that its outlook remains subject to downside risks from the sovereign debt issue in Europe. Recent credit-rating downgrades to much of the euro zone point to potential contagion by way of a drop in financial market liquidity,” he added. “The bottom line is that the Bank rate is not going to be going up anytime soon, and we may see rates lowered should downside risks materialize.”

The Bank noted that “while the economy appears to be operating with less slack than previously assumed, it is only anticipated to return to full capacity by the third quarter of 2013, one quarter earlier than was expected in October.” Overall, inflation expectations remain “well-anchored.”

A number of financial institutions have recently dropped their five-year lending rates to a record low of 2.99 per cent. This is down considerably from the advertised five-year rate of 5.29 per cent when the Bank last met on December 6th, 2011.

The Bank will make its next scheduled rate announcement on March 8th, 2012.

http://creastats.crea.ca/natl/interest_rate_trends.htm

OTTAWA – January 16, 2012 – According to statistics released today by The Canadian Real Estate Association (CREA), national resale housing activity posted an increase from November to December 2011.

Highlights:

• Sales activity rose 1.8 per cent from November to December.
• Annual activity totalled 456,749 sales in 2011, up 2.2 per cent from 2010.
• The number of newly listed homes increased 3 per cent from November to December.
• A simultaneous increase in sales and new listings kept the national resale housing in balanced territory.
• The national average home price was up just 0.9 per cent on a year-over-year basis in December, marking the smallest increase since October 2010.

Sales activity recorded through the MLS® Systems of Canadian real estate Boards and Associations rose 1.8 per cent from November to December 2011, marking the fourth consecutive monthly increase.

Activity rose in more than half of all local markets, including some of Canada’s most active, with monthly declines posted in most of the remaining markets.

Actual (not seasonally adjusted) national sales activity came in 4.6 per cent above year-ago levels in December. It also stood above the five- and ten-year average for December sales.

A total of 456,749 homes traded hands via Canadian MLS® Systems in 2011. This stands broadly in line with the average over the past ten years, and represents an increase of 2.2 per cent from annual levels reported in 2010.

“The momentum in sales activity provides clear evidence that low interest rates continue to draw homebuyers to the housing market,” said Gary Morse, CREA President. “While buyers have become increasingly cautious, the hand off for sales activity going into the New Year suggests that Canada’s housing market will continue to benefit from low interest rates in 2012, and continue making a significant contribution to Canadian economic activity. Even so, prospects among housing markets and neighbourhoods differ, so buyers and sellers should talk to a local REALTOR® to understand how trends are shaping up where they live.”

The number of newly listed homes rose three per cent on a month-over-month basis, reversing an equivalent monthly decline in November. New listings rose in almost 70 per cent of local markets, including some of Canada’s most active.

With sales and new listings having climbed in tandem, the national housing market remained in balanced territory in December. The national sales-to-new listings ratio, a measure of market balance, stood at 54.8 per cent in December, down slightly from 55.5 per cent in November.

Based on a sales-to-new listings ratio of between 40 to 60 percent, just over half of local markets in Canada were balanced in December. This result is little changed from November.

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. Nationally, it stood at 5.8 months at the end of December, down from 5.9 months at the end of November. While it has held fairly steady near six months since April 2011 onward, it peaked in August, with December marking the fourth monthly decline and a return to where it stood at the end of the first quarter.

The actual (not seasonally adjusted) national average price for homes sold in December 2011 was $347,801. This stood just 0.9 per cent above the average selling price in December 2010, marking smallest increase since October 2010.

“Momentum for national sales activity and average price remains positive but is slowing, which suggests that the continuation of low interest rates is not causing the Canadian housing market to overheat,” said Gregory Klump, CREA’s Chief Economist. “High end home sales seem unlikely to spike again in the first quarter like they did at the beginning of 2011, so national average price momentum may wane further over the next few months. With interest rates widely expected to remain low throughout 2012, homeownership will remain affordable, and continue to support home sales activity.”

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

Further information can be found at http://www.crea.ca/public/news_stats/media.htm.