The average price of a Canadian home sold last month was $481,745, a figure that has fallen by 1.8 per cent in the past 12 months, the Canadian Real Estate Association says.
The group that represents realtors says that prices were lower, on average, and the number of homes sold was also down by 4.6 per cent compared to March of last year. Spring is typically the busiest time of year for home sales, a trend that sometimes starts as early as March, but this year was the weakest March for home sales since 2013.
“Many prospective home buyers remain sidelined by the mortgage stress-test to varying degrees, depending on where they are looking to buy,” CREA president Jason Stephen said.
CREA says the average price figure can be misleading, because it tends to be overly influenced by activity in large markets like Toronto and Vancouver, which skew it. So instead they say another number known as the House Price Index, is a better gauge of the market.
The national HPI declined by 0.5 per cent in March, it’s biggest decline since 2009. But even then there were wide variances across the country. The HPI was up by more than five per cent on Vancouver Island, in Montreal, and in the Ontario markets of Ottawa, Guelph and the Niagara area.
Conversely, it fell by more than five per cent in Greater Vancouver, in B.C.’s Lower Mainland and Barrie, Ont.
Calgary, Edmonton and Regina, meanwhile, were all down by more than four per cent in the past 12 months.
“The home pricing environment will likely remain weak in these cities until demand and supply become more balanced,” CREA said of those Prairie markets.
“March results suggest local market trends are largely in a holding pattern,” CREA’s chief economist Gregory Klump said. “While the mortgage stress test has made access to home financing more challenging, the good news is that continuing job growth remains supportive for housing demand and should eventually translate into stronger home sales activity.”
CREA did note that while still home sales were still far lower in March than they were a year ago, they did tick up 0.9 per cent from the record low they hit in February. It’s important to remember, however, that March also has more days than February, so some sort of rebound was to be expected just from having three more selling days in it.
Toronto-Dominion Bank economist Rishi Sondhi called the March numbers “a half-hearted recovery from the prior month’s weather induced plunge,” and noted that “soft demand has bled into prices, with the annual growth in benchmark prices the weakest since the financial crisis.”
Sondhi predicts that the market will improve somewhat for the rest of the year, and get helped by lower mortgage rates, which should be much lower than they currently are based on what’s happening in the bond market.
“A modest improvement in sales is anticipated over the remainder of 2019, as demand is supported by resilient labour markets and healthy population growth,” he said.