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CREA National Home Sales Spike 3.9%


Under Market Updates

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December 29th, 2017

Canadian home sales jumped in November, as buyers rushed in to avoid new mortgage rules which come into effect in the new year.

According to the Canadian Real Estate Association (CREA), national home sales rose 3.9% in November, a spike well above October’s 0.9% increase.

“Some home buyers with more than a twenty per cent down payment may be fast-tracking their purchase decision in order to beat the tougher mortgage qualifications test coming effect next year,” writes CREA president Andrew Peck, in a statement.

Announced in October, the mortgage test will come into effect on January 1, and will require all uninsured mortgage borrowers to qualify against the Bank of Canada’s five-year benchmark rate, or at their contract mortgage rate plus an additional 2%.

According to CREA chief economist Gregory Klump, it’s unclear what the test will mean for sales in 2018.

“It remains to be seen whether stronger momentum now will mean weaker activity early next year once new mortgage regulations take effect beginning on New Year’s day,” writes Klump, in a statement.

CREA is forecasting a home sales decline of 5.3% in 2018, as the market adjusts to the new rules.

Here are 9 facts to help make sense of November’s sales surge :

1. National home sales rose 3.9% in November, led by a whopping 16% jump in sales in the GTA.

2. That puts sales activity a little over halfway between the peak reached in March, and the low recorded in July.

3. While this spike marks the fourth month-over-month sales increase, it is also the first year-over-year increase in months. Sales were up 2.6% from November 2016, setting a new November record.

4. National new home listings were up 3.5%, led by an increase in supply in the GTA.

5. The national sales-to-new-listings ratio was 56.4% in November, a slight increase from October’s 56.2%. A ratio of between 40 and 60% is considered consistent with a balanced housing market, with ratios above and below indicating buyers’ and sellers’ markets, respectively.

6. The aggregate composite MLS housing price index rose by 9.3% year-over-year in November. It’s a deceleration from record gains in March, and the smallest year-over-year increase since February 2016.

7. Apartment units had the largest price increase, at 19.4% year-over-year, while single-family home prices increased just 6%.

8. The actual national average price for homes in November was $504,000 up 2.9% year-over-year. The average was boosted by Vancouver and the GTA — without them, it would fall to just $381,000.

9. The average Canadian home price is forecast to drop by 1.4% in 2018, to $503,100, largely due to a cooler GTA market.

9 Stats That Show Canada’s November Sales Spike by Sarah Niedoba | Buzz Buzz Home

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