Written by Ontario Construction News staff
According to a Canadian Real Estate Association (CREA) report released August 15, July home sales rose 3.5 per cent over June’s numbers for the country, representing a 12.2 per cent rise over July 2018
National average sale price rose 3.9 per cent year-over-year, bringing the number to just under $499,000. This number is brought significantly higher by prices in areas like the GTA
The report says that activity around home sales increased in over half of local markets.
“The extent to which recent declines in mortgage interest rates have helped lift sales activity varies by community and price segment,” said Jason Stephen, CREA president.
The report details that while national averages are helped along by the GTA and Vancouver markets, those areas are still not where they were prior to the adoption of the federal government’s mortgage stress test. The stress test requires federally regulated banks to qualify mortgage applicants by showing they could handle payments even if interest rates were to rise a significant amount.
“Sales are starting to rebound in places where they dropped when the mortgage stress test took effect at the beginning of 2018, but activity there remains well below levels recorded prior to its introduction,” said Gregory Klump, CREA’s chief economist.
“By the same token, sales continue to rise in housing markets where the mortgage stress test had little impact due to upbeat local economic conditions and a supply of affordably priced homes. Meanwhile, the mortgage stress test is doing no favours for homebuyers and sellers alike in places facing challenging local economic prospects and subdued consumer sentiment,” Klump said.
While sales were up in July, listings declined slightly, leading to a tighter national sales-to-new-listings ratio of 59.8 per cent, compared with 57.6 per cent the previous month.
CREA says all these numbers indicate that about three-quarters of local markets appear to be in market balance, meaning it’s not a seller’s nor a buyer’s market, but relatively equal field for both parties. However, Ontario’s months of inventory number remains well below long-term averages, meaning competition for houses can be strong, and can lead to price increases.