Canadian home sales, prices climb higher in February

Canadian Real Estate Association says home sales in February were up 0.3 per cent from January and up 1.9 per cent compared with a year ago.

Average selling prices meanwhile surged by double digits, according to CREA.

The national average price for a home sold last month was $406,372, up 10.1 per cent from a year ago, boosted by a pick up in sales in the pricey Vancouver market.

The MLS Home Price Index — considered by experts to be a more balanced reading — indicated prices rose by more modest 5.1 per cent.

READ MORE: House price correction to ‘start this year,’ big-name investor warns

The association also trimmed its sales forecast for 2014 to 463,700 compared with expectations for 475,000 in its December outlook.

February’s increase in home resales broke a streak of five straight monthly declines. But a strong resurgence in resales isn’t anticipated by experts.

“The performance of Canada’s housing market over the last few months is largely reflective of a cooling in Canadian housing demand,” TD economist Diana Petramala said.

“Sales are moving at a pace that is neither  too hot, nor too cold.”

CREA has reduced its sales forecast for the full year to 463,700 units, compared with expectations for 475,000 in its December outlook, but still expects activity to be above last year.

A total of 457,893 homes were sold through the MLS system in 2013.

Home prices generally lag six months behind resales figures.

“The only thing that has not happened yet is a slowing in Canadian home price growth – but that too will likely come,” Petramala predicted.

West versus east

BMO economist Robert Kavcic took a regional look at the market in February and came away with this:

Calgary: Heating up quickly again, with sales up 14% (year over year) and the months’ supply across Alberta matching the lowest level since 2007. Benchmark prices in the city are up 9.1%, “surpassing the 2007 peak,” with a strong economy, demographics and tight supply helping.

READ MORE: Job growth has flat-lined across the country — except in Alberta 

Toronto: A balanced overall market. Benchmark prices, however, are up a solid 7.3%, with bungalows running at twice the pace of condos—many worry about condo supply, but backyards remain scarce.

Vancouver: Sales growth is “eye-catching”, but the level of activity is merely back to 10-year norms. “The good news is that the market has largely balanced, and prices are rising again,” Kavcic said.

Saskatchewan’s two larger cities are still seeing decent combined sales levels, but supply has caught up (7.3 months’ across the province). As a result, benchmark prices are slipping.

Montreal: Seasonally-adjusted sales are at the lowest level since the recession, consistent with a weak economy, and the months’ supply across Quebec is the highest in at least a decade. Price growth in Montreal has slowed sharply, particularly for condos.

Ottawa: A buyers’ market here with fiscal restraint ongoing. Sales are near a 15-year low versus new listings, and benchmark prices have dipped below year-ago levels.

Atlantic Canada remains “weak overall”, with sales down in all 4 provinces versus a year ago—”Alberta’s strong demographics are reversed here”.

— With files from the Canadian Press