The Canadian Real Estate Association (CREA) announced on Monday that national home sales slightly tracked lower over the period of August to September this year, resulting in a decline of sales activity.
National home sales via Canadian Multiple Listing Service (MLS) Systems slowed down by 0.4% last month, marking the first drop since April. While sales activity stayed below the levels recorded over the last four years, the results are stronger than the first half of this year.
The report noted that the decrease in sales was driven by Vancouver Island and Edmonton, along with several markets in Ontario’s Greater Golden Horseshoe (GGH) Region. On the bright side, the losses were countered by monthly rises in the Fraser Valley and Montreal.
Actual (not seasonally adjusted) activity, meanwhile, was down 8.9% compared to September 2017. A closer look revealed that declines were driven by losses logged in British Columbia, Calgary, Edmonton and Winnipeg, however nearly 70% of local markets were down in terms of activity.
“The balance between the number of home buyers and suitable homes varies depending on location, housing type and price range,” explained CREA President Barb Sukkau.
“Differences in market balance will likely come into sharper focus as interest rates rise and cause this year’s new mortgage stress-test to become even more restrictive. A professional REALTOR is your best source for information and guidance in negotiating a purchase or sale of a home during these changing times.”
Finally, it was found that the number of newly listed homes increased by 3% during the period brought about by performances of the Lower Mainland and the Greater Toronto Area (GTA). Further, more than half of all local markets registered a monthly hike in new listings, which was offset by declines in excess of 3% in more than half of the remaining local markets.
CREA’s Chief Economist Gregory Klump highlighted that both sales activity and number of listings dictate the prices in the market.
“In markets with an abundant supply of homes and slower sales activity, buyers have the upper hand when it comes to negotiations over price. However, in places where buyers are keen to make a purchase but there’s a shortage of homes for sale, sellers are in the driver’s seat when it comes to price. It will be interesting to see how supply and demand respond to rising interest rates amid this year’s new mortgage stress-test,” he concluded.
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