It is assumed that Canada’s housing markets will see a slowdown in activity this year as buyers adjust to the new realities of stricter mortgage rules, but then again, maybe not. In December, sales were up 2.2% compared to the previous month, reports the Canadian Real Estate Association, after a sharp drop in November. That was the first full month in which the new rules were in place, and sales fell 5%. December’s rebound, however, which was seen in 60% of local markets, could indicate that Canadian homebuyers are prepared to shrug off the new rules and continue buying homes. CREA says the extent to which sales activity is affected going forward will vary from market to market.

Sales set a new annual record in 2016, CREA president Cliff Iverson said, but he doesn’t think that will be repeated this year. Neither does CREA economist Gregory Klump, who said that home sales are unlikely to benefit the Canadian economy as much this year as they did last year. The housing market contributed about 7% of Canada’s total GDP in 2016.

Despite sales being up, new listings were down in December, dropping by 3%. This was enough to push the markets deeper into sellers’ market territory. The ratio of sales to new listings rose to 63.5% nationally, up from 60.3% in November. Anything above 60 indicates sellers’ market conditions.

Prices rose as well. CREA’s Aggregate Composite Home Price Index was up 14.2% year over year, though that was slightly less of a rise than in previous months. The biggest year-over-year price gains were for two-storey single-family homes (16.1%) and townhomes (15.4%). Bungalow and condominium prices rose 13.3% and 12% respectively. The actual national average price for homes sold in December was $470,661, an increase of 3.5% over the year.

Inventory of available housing fell to 4.6 months nationally, and is particularly tight in the Greater Golden Horseshoe region of Ontario, with supplies of less than a month in some markets, including Orangeville, Oakville, Milton, Kitchener-Waterloo, Brantford and Cambridge.

National Home Sales Up in December as Supply Tightens by Josephine Nolan | Condo.ca