January was a very good month for real estate sales in Canada’s two main housing markets, Toronto and Vancouver, but not so good in the rest of the country, new numbers from the Canadian Real Estate Association (CREA) show. Sales were up sharply in the two big markets, despite the constraint of limited supply. Sales declined in a number of cities, however, including Calgary and Edmonton, pulling the national increase in sales down to just 0.5%. That was still the highest level of activity nationally since late 2009, according to CREA.

The problem of supply remains acute, especially in Toronto and Vancouver. The number of newly listed homes dropped by 4.9% nationally in January, compared to December. CREA president Pauline Aunger commented that sales would have been even higher in the GTA and the Vancouver area if listings had not been in such short supply. In Vancouver, the sales-to-new-listings ratio reached an “almost unheard of” 91%, meaning that virtually every new listing is absorbed within the month. Sellers market conditions prevailed in about one-third of all local housing markets, mostly in Ontario and BC, according to CREA.

“January 2016 picked up where 2015 left off, with single family homes in the GTA and Greater Vancouver in short supply amid strong demand standing in contrast to sidelined home buyers and ample supply in a number of Alberta housing markets.”

Prices, accordingly, continued to rise sharply in Toronto and Vancouver in January. How sharply can be seen by comparing the national average home price increase with and without the provinces of Ontario and British Columbia. With them, the national average home price was up 17%, reaching $470,297; without them, that price fell 0.3%, to an average of $286,911. Forecasts call for continued price and sales declines in the oil-dependent provinces of Alberta and Newfoundland and Labrador until oil prices rebound.

While the Toronto resale market experienced tight conditions due to the short supply of listings, new home builders responded by increasing their activity. New home starts picked up slightly in January, Canada Mortgage and Housing Corporation reported, up 2.4% compared to December. The number of starts was higher in both the low-rise and high-rise segments. Builders started construction of 725 new condominiums in Toronto in January, CMHC said.

Canada’s Housing Market Activity Varies Widely in January by Josephine Nolan | Condo.ca