Activity in Canada’s residential property market gained strength in the final months of last year with sales, listings and prices up in December, the latest index shows.

Sales increased by 4.1% year on year, national average prices were up 5.7% year on year and new listings rose by 3.3% month on month in December 2017, according to the data from the Canadian Real Estate Association (CREA).

The national average price for homes sold in December 2017 was just over $496,500 but the index report points out that this was heavily skewed by sales in Greater Vancouver and the GTA, two of Canada’s most active and expensive markets. Excluding these two markets from the calculation takes almost $116,000 from the national average price to just under $381,000.

Overall, activity in December was up in close to 60% of all local markets, led by the Greater Toronto Area (GTA), Edmonton, Calgary, the Fraser Valley, Vancouver Island, Hamilton-Burlington and Winnipeg.

While activity remained below year ago levels in the GTA, the decline there was more than offset by some sizeable year on year gains in the Lower Mainland of British Columbia, Vancouver Island, Calgary, Edmonton, Ottawa and Montreal.

“Monthly momentum for national home sales activity gained strength late last year and further expected economic and job growth will buoy sales activity this year despite slightly higher expected interest rates,” said CREA president Andrew Peck.

However tighter mortgage regulations came into force on 01 January 2018 and CREA chief economist said this could hit sales going forward. ‘National home sales in December were likely boosted by seasonal adjustment factors and a potential pull-forward of demand before new mortgage regulations came into effect this year,’ he pointed out.

The number of newly listed homes rose 3.3% in December. As in November, the national increase was overwhelmingly due to rising new supply in the GTA. New listings and sales have both trended higher since August. As a result, the sales to new listings ratio has remained in the mid to high 50% range since then.

A national sales to new listings ratio of between 40% and 60% is generally consistent with a balanced national housing market, with readings below and above this range indicating buyers’ and sellers’ markets respectively. That said, the balanced range can vary among local markets.

There were 4.5 months of inventory on a national basis at the end of December 2017. The measure has been moving steadily lower in tandem with the monthly rise in sales that began last summer.

Benchmark home prices were up from year ago levels in nine of the 13 markets tracked by the index with Calgary and Oakville-Milton price comparisons tipping slightly into negative territory on a year on year basis.

After having dipped in the second half of last year prices in the Lower Mainland of British Columbia have recovered and now stand at new highs. Prices in Greater Vancouver were up 15.9% year on year and in Fraser Valley they were up 20.9%.

Prices rose by about 14% year on year in Victoria and by about 19% elsewhere on Vancouver Island in December. These annual gains were similar to those recorded in October and November. Prices rose by 6.6% year on year in Ottawa, by 5.4% in Greater Montreal and by 6.3% in Greater Moncton.

However, annual price growth has slowed considerably in the GTA, Guelph and Oakville-Milton but in the former two markets they remain above year ago levels. Greater Toronto saw prices rise 7.2%, in Guelph they rose 13.1% but in Oakville-Milton they fell by 0.8%.

Prices were also down in Calgary with a year on year fall of 0.4% with prices in Regina and Saskatoon down 4% and 3.7% respectively.

Property Market Activity Gained Momentum in Canada at End of 2017 by Property Wire