Canada's Condominium Magazine
Canadian housing sales in May were close to where they were last July, marking the first “noteworthy” increase in nine months, the Canadian Real Estate Association (CREA) said today. On a month-over-month basis, sales were up 3.6 per cent in May compared to April, with new listings also rising. It was the largest monthly gain in two and a half years. On a year-over-year basis, sales were 2.6 per cent lower than in May 2012, with sales down in more than half of local markets.
It was in July, 2012 when new mortgage-lending rules took effect in Canada, and an expected drop in home sales ensued. Sales dropped more or less steadily until February 2013 and have been rising again through the spring.
Improvements in home sales were widespread in May, with two-thirds of all markets reporting increases, including Vancouver, Calgary, Edmonton, Winnipeg, the GTA and Montreal. CREA economist Gregory Klump noted that May was different from other recent months in that sales improved “in so many markets at the same time,” unlike the “mixed” sales trends that have been the rule over the past several months.
Taken along with other positive indicators in recent weeks, including higher-than-expected employment gains in May, the “pop” in Canada’s resale housing numbers provides more evidence of the “widely anticipated” improvement in the economy as a whole.
New listings were also up in May, with an increase of 1.9 per cent in listings in most markets. Since sales outstripped new listings, the national sales-to-new-listings ratio rose to 51.4 per cent, up from 50.6 per cent in April. A sales-to-new-listings ratio between 40 and 60 indicates a balanced market.
The average price of a home was up 3.7 per cent in May, reaching $388,910. For the first time in almost two years, the Vancouver market had a positive rather than negative impact on the national average housing price, CREA said.
As reported earlier, home sales in Toronto were up about 1 per cent in May compared to April. Sales of single detached homes showed the greatest gains, rising 3 per cent year over year in the City of Toronto. The average selling price in Toronto rose 5.4 per cent, to $542,174 in May.
Mayor Ford campaigning again on land transfer tax
No doubt needing a friendly audience for a change, Toronto mayor Rob Ford spoke to Toronto realtors on Friday and urged them to do something they have been urging him to do for two years: eliminate the land transfer tax. Ford asked them to pressure city councilors to kill the tax that adds about $10,000 to the cost of an average home in Toronto. Ford campaigned on a promise to eliminate the tax, but has not made good on that promise so far.
The Toronto Real Estate Board (TREB) has long argued against the land transfer tax, releasing numerous polls that show public disapproval of the tax. However, it brought the city $344.5 million in revenue in 2012, and some councilors say the city can’t afford to give that up. Ford, however, pledged to start phasing it out, with a 10 per cent cut to start.
TREB has also warned that the land transfer tax will drive home buyers out of the city of Toronto into the suburbs. The realtors, not unexpectedly, support the mayor’s position on phasing out the tax, saying that it’s “unrealistic” to expect the city to eliminate it all at once.