National home sales increased in June compared to May according to new data from the Canadian Real Estate Association.
The 4.1% rise in national home sales resulted from increased sales activity across more than 60% of all local housing markets led by the Greater Toronto Area. But sales in British Columbia continued to moderate.
Despite the gains, Junes sales were well below monthly levels recorded over the past five years and actual (not seasonally adjusted) activity was down almost 11% year over year.
Sales were almost 7% below the 10 year average for the month of June and mark a five year low, with activity below year-ago levels in around two thirds of all local markets.
There was a notable decline in the Lower Mainland of British Columbia.
“This year’s new stress-test on mortgage applicants has been weighing on homes sales activity; however, the increase in June suggests its impact may be starting to lift,” said CREA President Barb Sukkau. “The extent to which the stress-test continues to sideline home buyers varies by housing market and price range.”
Listings down, sale prices lower
There was a decline in new listings of 1.8% in June, including lower levels in BC’s Lower Mainland, Calgary, Edmonton, Ottawa, and Montréal.
With fewer listings and higher sales, the sales-to-new-listings ratio tightened to 54.3%, up from 51.2% in May. The long-term average is 53.4%. Inventory tightened to 5.4 months from 5.6 months in May but remained above the long-term average of 5.2 months.
The national average sale price of homes was down 1.3% year-over-year to $496,000; however, of the past five monthly y-o-y declines, June’s was the smallest.
The Aggregate Composite MLS® HPI was up 0.9% y-o-y in June 2018, marking the 14th consecutive month of decelerating gains and the smallest increase since September 2009.
The movement in prices is heavily impacted by the hottest markets and trends vary in local markets.
Looking ahead to improvement
“The national increase in June home sales suggests activity may indeed be starting to turn the corner,” said, Gregory Klump, CREA’s Chief Economist. “Even so, the number of homes trading hands has a long way to go before it returns to levels posted in recent years. Looking ahead, home sales activity and price gains will likely be held in check by higher interest rates.”