Home sales were up slightly nationwide for the month of March, but
remain well below levels recorded from a year ago, according to
statistics released today by the Canadian Real Estate Association
(CREA).
More importantly, the Home Price Index for March rose only 2.2 per cent – its smallest gain in more than two years.
“National sales have been holding fairly stable since last summer,”
says CREA President Laura Leyser. “We’ll be watching closely as the
spring market picks up to see whether the March sales increase marks the
beginning of an improving trend.”
Home sales rose 2.4 per cent from February to March of this year, but
actual activity for March compared to the same month a year ago were
15.3 per cent below the 2012 levels.
New listings were up 3.2 per from February to March, with average sale prices up 2.5 per cent from compared to March 2012.
CREA attributes the sluggish March sales numbers to the Easter holiday
and the loss bank days due to an extra full weekend at the end of the
month – known as the “trading day effect.”
“Easter and trading day factors combined effectively to cut March sales
short,” says Gregory Klump, CREA’s chief economist. “Activity in the
months ahead will reveal whether the monthly improvement in seasonally
adjusted March sales reflects technical seasonal adjustment factors or a
fundamental improvement in demand.”
Home sales improved in more than half of all local markets from
February to March, led by gains in Greater Vancouver, Fraser Valley,
Calgary, Greater Toronto, Montreal, Saskatoon, Hamilton-Burlington, and
Kitchener-Waterloo.
“That said, the factors that crimped March sales this year were not in
play for the same month last year, resulting in speculation that the gap
between sales activity this March and March of last year would be
bigger than it was in February,” says Klump. “That the gap in fact
improved marginally speaks to the resilience of housing demand in
Canada.”
Actual (not seasonally adjusted) activity came in 15.3 per cent below
levels reported in March 2012, compared to a year-over-year decline in
February sales of 15.9 per cent. Although transactions remained down
from year-ago levels in more than 90 per cent of all local markets, the
gap diminished in a number of large urban markets, including Greater
Vancouver, Calgary, Regina, Saskatoon, Montreal, and Quebec City. As was
the case in February, Edmonton was the only large urban market in which
monthly sales surpassed year-ago levels.
“Analysis will likely continue to focus on how sales remain down from
last year, but this shouldn’t come as a surprise given that mortgage
regulations and lending guidelines at that time were yet to be
tightened,” says Klump. “Since those factors came into force, national
home sales have held fairly steady, notwithstanding the rise in
seasonally adjusted March sales.”
