Financial Post Staff, March 17, 2014 - Canadian existing home sales edged up 0.3% in February, breaking a five-month run of declines, but the national view doesn’t tell the whole story. Nationally, home sales are up 1.9% from a year ago, but BMO senior economist Robert Kavcic says markets vary widely across the country with half of Canada’s largest cities reporting a sales dip from a year ago.
To get a more comprehensive view here’s Kavcic’s survey of the health of the country’s major markets, from strongest to weakest:
“Calgary: Heating up quickly again, with sales up 14% y/y and the months’ supply across Alberta (3.5) matching the lowest level since 2007. Benchmark prices in the city are up 9.1% y/y, surpassing the 2007 peak, with a strong economy, demographics and tight supply helping.
Toronto: Sales and listings are both little-changed from a year ago, portraying a balanced overall market. Benchmark prices, however, are up a solid 7.3% y/y, with bungalows running at twice the pace of condos—many worry about condo supply, but backyards remain scarce.
Vancouver: Sales growth is eye catching, but the level of activity is merely back to 10-year norms. The good news is that the market has largely balanced, and prices are rising again.
Saskatchewan’s two larger cities are still seeing decent combined sales levels, but supply has caught up (7.3 months’ across the province). As a result, benchmark prices are slipping.
Montreal: Seasonally-adjusted sales are at the lowest level since the recession, consistent with a weak economy, and the months’ supply across Quebec (12.7 vs. 6.4 nationally) is the highest in at least a decade. Price growth in Montreal has slowed sharply, particularly for condos.
Ottawa: A buyers’ market here with fiscal restraint ongoing. Sales are near a 15-year low versus new listings, and benchmark prices have dipped below year-ago levels.
Atlantic Canada remains weak overall, with sales down in all 4 provinces versus a year ago—Alberta’s strong demographics are reversed here. With the exception of PEI, months’ supply is at or near 10-year highs.
The Bottom Line: Canada’s housing market still looks balanced overall, but conditions vary widely across regions and for even segments within regions. National price momentum has picked up, but gains have not been widespread across markets—and that should provide some solace to policymakers.”
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