(Troy Media) Canadian MLS sales fell by 2.5 per cent in December from November, capping the weakest annual sales since 2012, says the Canadian Real Estate Association.
According to its monthly MLS report, which was released on Tuesday, CREA said monthly declines in activity since September have fully retrenched its summer rally and returned it near the lowest level since early 2013.
CREA said transactions declined in about 60 per cent of all local markets in December, led by lower activity in Greater Vancouver, Vancouver Island, Ottawa, London and St. Thomas, and Halifax-Dartmouth.
MLS sales of 21,909 across the country were down 19 per cent year-over-year and were about 12 per cent below the 10-year average for the month of December.
“This decline, in part, is due to elevated activity posted in December 2017 as home buyers rushed to purchase in advance of the new federal mortgage stress test that came into effect on Jan. 1, 2018,” said CREA.
Barb Sukkau, CREA’s president, said homebuyers rushed in December 2017 to purchase homes before the regulations came into effect.
“Since then, the stress-test has weighed on sales to varying degrees in all Canadian housing markets and it will continue to do so this year,” she said.
Nationally, the average MLS sale price of $496,696 was down 4.9 per cent year over year.
“The Bank of Canada recently said that it expects housing activity will stay ‘soft’ as households ‘adjust to the mortgage stress-test and increases in mortgage rates,’ even as jobs and incomes continue growing,” said Gregory Klump, CREA’s Chief Economist. “Indeed, the Bank’s economic forecast shows it expects housing will undermine economic growth this year as the mortgage stress test has pushed home ownership affordability out of reach for some home buyers.”
The Aggregate Composite MLS Home Price Index was up 1.6 per cent year-over-year in Canada to $616,700. Calgary home prices fell by 3.16 per cent to $413,900 while Edmonton prices were down by 2.04 per cent to $319,200.