Listings fall again to end 2019, pushing prices higher

Canadian Real Estate Association data show that national-level home sales fell 0.9% (sa m/m) in December 2019 after rising in the previous nine months. Limited availability looks to be increasingly weighing on sales activity. The month saw another broad-based decline in new listings—18 of the 31 centres for which we have data witnessed falls—that lifted the national sales-to-new listings ratio to 66.9%. It was the highest ratio since 2004 and a third straight month of supply- demand conditions tilted in favour of sellers (after data revisions). Fourteen cities reported sellers’ market conditions; the rest were balanced. The aggregate MLS Home Price Index (HPI) rose 3.4% (nsa y/y), its best gain since March 2018.

Montreal remained Canada’s tightest local market, with rising sales and falling listings leading to yet another record-high sales-to-new listings ratio and the city’s steepest y/y MLS HPI gains since 2005. Ottawa’s ratio also reached a new high as new listings plunged by more than 20% (sa m/m), driving a record 12.5% (nsa y/y) MLS HPI increase. Toronto also crept into sellers’ market territory for the first time since March 2017—as in Montreal, home purchases rose and new listings fell—and its 7.3% (nsa y/y) HPI rise was the sharpest since 2017.

Vancouver’s sales-to-new listings ratio actually edged lower in December—that kept supply and demand roughly balanced—as a jump in new listings outweighed a rise in sales volumes. New listings climbed in the other three Southern BC cities last month. Home buying was mixed in December, but housing demand has clearly been trending higher in Canada’s westernmost province in recent months, following multiple years of policy-influenced slowdown.

In Canada’s net oil-producing provinces, Calgary and Edmonton witnessed rising sales, with a pickup in new listings keeping supply-demand conditions balanced in both cities. Purchases surged more than 30% (sa m/m) in Regina, continuing that city’s recent volatility and returning it to balanced market territory. In St. John’s, home sales completed their strongest year since 2007, though the bulk of those gains were driven by first half buying activity.

Source: Scotiabank

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