May home sales up as buyers come back into market

OTTAWA — Canadian home sales picked up on May as buyers came back into the market helped by low mortgage rates, but economists cautioned against the momentum continuing.

OTTAWA — Canadian home sales picked up on May as buyers came back into the market helped by low mortgage rates, but economists cautioned against the momentum continuing.

The Canadian Real Estate Association said Monday that home sales through its Multiple Listing Service system were 5.9 per cent higher compared with April, the largest month-over-month increase in nearly four years.

TD Bank economist Leslie Preston noted the combination of the bounce back from the frigid winter that froze the market and a recent decline in mortgage rates was “clearly a potent combination for May home sales.”

“Clearly pent-up demand for housing was building over the winter months, and home sales could keep some of their current momentum for a few months yet as lenders continue to advertise very attractive mortgage rates,” Preston wrote in a note.

“However, employment growth is quite modest and house prices continue to outstrip gains in incomes, and TD expects that sales momentum will ebb later this year.”

The gain in sales on a month-over-month basis came as the number of newly listed homes increased 3.8 per cent from April to May.

“In markets where supply had become tight, we expected sales to improve in tandem with listings,” CREA chief economist Gregory Klump said in statement.

“Had it not been for such a brutal winter that delayed the launch of the spring market, the improvement in new listings and sales would likely have been more spread out over the past few months.”

Sales compared with a year ago were up 4.8 per cent, however, those gains were concentrated in Western Canada, while Quebec and Atlantic Canada were lower compared with May 2013.

The gains came as the national average price for a home sold in May was $416,584, up 7.1 per cent from the same month last year, pushed higher by gains in Toronto and Vancouver.

Excluding the Greater Vancouver and Greater Toronto markets, the average price was $336,373, up 5.3 per cent from a year ago.

The Aggregate Composite MLS Home Price Index was up 4.98 per cent compared with a year ago.

BMO senior economist Robert Kavcic said the east-west split echoes economic and population growth.

“Canada’s housing market continues to look balanced and sturdy overall but big disparities persist below the surface.

“One reason policy makers might be a bit hesitant to act again soon is that strong price gains are confined to a few select markets, or even sub-markets, while a wide swath of the country (at least geographically) is seeing downright dreary conditions.”

Despite the strong month-over-month results, CREA trimmed its outlook for the year compared with a forecast in March.

The association is predicting sales would total 463,400 homes for the year, up 1.2 per cent compared with 2013. The updated outlook compared with the March forecast for 463,700.

“The deferral of sales and listings reflects a delayed start to the spring home buying season, with combined sales for the period from March to May coming in largely as anticipated and at average levels,” the association said in its forecast.

“These deferrals are now likely to have been largely depleted, which suggests that the strength of sales momentum heading into the summer may be transient.”

Get local stories you won't find anywhere else right to your inbox.
Sign up here

Just Posted

Asymptomatic testing will now be available for "priority groups" who are most likely to spread the COVID-19 virus to vulnerable or at-risk populations. File photo by THE CANADIAN PRESS
Marcus Golczyk, with Taco Monster, hands food to a customer during Food Truck Drive and Dash in the Westerner Park parking lot in Red Deer Friday afternoon. The drive-thru event will run every Thursday from 4-7 p.m. and Friday from 11 a.m. to 2 p.m. through June. Photo by SEAN MCINTOSH/Advocate staff
Food Truck Fridays, Food Truck Drive and Dash return in Red Deer

Red Deerians are able to take in a drive-thru food truck experience… Continue reading

Don and Gloria Moore, of Red Deer, are set to celebrate their 70th anniversary later this month. (Contributed photo)
Red Deer couple to celebrate 70th anniversary

Red Deer couple Don and Gloria Moore are set to celebrate their… Continue reading

Chris Scott, owner of The Whistle Stop Cafe, was put in handcuffs after an anti-restriction protest Saturday in the parking lot of the business. (Screenshot via The Whistle Stop Facebook page)
UPDATE: Central Alberta cafe owner arrested after anti-restriction protest

The owner of a central Alberta cafe, which was the site of… Continue reading

Alberta has 1,910 active cases of COVID-19 as of Wednesday. Red Deer is reporting five active cases, with 108 recovered. (File photo)
Red Deer now has 911 active COVID-19 cases

Central zone has 2,917 active cases

FILE - A firefighter wears a mask as he drives his truck. THE CANADIAN PRESS/Jonathan Hayward, File
VIDEO: Flames rip through Edmonton-area seniors complex, but no fatalities

ST. ALBERT, Alta. — Fire has destroyed part of a retirement complex… Continue reading

Quebec Premier Francois Legault chairs a premiers virtual news conference as premiers John Horgan, B.C., Jason Kenney, Alberta, and Scott Moe, Saskatchewan, are seen onscreen, Thursday, March 4, 2021 in Montreal. THE CANADIAN PRESS/Ryan Remiorz
Several provinces bring in new restrictions as high COVID-19 case numbers persist

Several provinces are gearing up to tighten public health measures once again… Continue reading

Members of the RCAF take part in a Royal Canadian Air Force change of command ceremony in Ottawa on Friday, May 4, 2018. The Royal Canadian Air Force is hoping Canada will open its doors to military pilots from other countries as it seeks to address a longstanding shortage of experienced aviators. THE CANADIAN PRESS/ Patrick Doyle
RCAF turns to foreign pilots to help with shortage as commercial aviators stay away

OTTAWA — The Royal Canadian Air Force is hoping Canada will open… Continue reading

An arrivals and departures information screen is seen at the Halifax Stanfield International Airport in Halifax on Thursday, Jan. 4, 2018. The chief executive of Atlantic Canada's largest airport is hoping for COVID-19 testing for arriving passengers "sooner rather than later," as an added measure to combat the province's third wave of the virus. THE CANADIAN PRESS/Andrew Vaughan
Halifax airport CEO hopes for more on-site COVID testing ‘sooner rather than later’

HALIFAX — The chief executive of Atlantic Canada’s largest airport is hoping… Continue reading

Shoppers wear mask as they shop at a nursery & garden shop on Mother's Day weekend during COVID-19 pandemic in Wilmette, Ill., Saturday, May 8, 2021. (AP Photo/Nam Y. Huh)
Tearful reunions mark second Mother’s Day under pandemic

Last Mother’s Day, they celebrated with bacon and eggs over FaceTime. This… Continue reading

Arizona Coyotes head coach Rick Tocchet, standing, watches the game during the second period of an NHL hockey game Wednesday, April 14, 2021, in St. Paul, Minn. The Wild won 5-2. (AP Photo/Craig Lassig)
Tocchet won’t return as coach of Coyotes after 4 seasons

GLENDALE, Ariz. — The Arizona Coyotes and coach Rick Tocchet have mutually… Continue reading

Columbus Blue Jackets head coach John Tortorella shouts at an official after a fight between Columbus Blue Jackets' s Gavin Bayreuther and Florida Panthers' Sam Bennett during the second period of an NHL hockey game, Monday, April 19, 2021, in Sunrise, Fla. (AP Photo/Lynne Sladky)
Tortorella out after 6 years as Columbus Blue Jackets coach

COLUMBUS, Ohio — John Tortorella is out as coach of the Columbus… Continue reading

A caribou grazes on Baffin Island in a 2008 file photo. A last-ditch attempt to save some of Canada's vanishing caribou herds is a step closer after a scientific review panel's approval of a plan to permanently pen some animals and breed them to repopulate other herds. THE CANADIAN PRESS/AP-Kike Calvo via AP Images
Parks Canada captive caribou breeding proposal gets OK from scientific review panel

JASPER, Alta. — A last-ditch attempt to save some of Canada’s vanishing… Continue reading

The smouldering remains of houses in Slave Lake, Alta., are seen in a May 16, 2011, file photo. The wildfire that is devastating large swaths of the northern Alberta city of Fort McMurray comes just five years after another blaze destroyed 400 buildings and left 2,000 people homeless in Slave Lake, Alberta. THE CANADIAN PRESS/Ian Jackson
Ten years later: Five things to know about the Slave Lake wildfire

A wildfire burned about one-third of Slave Lake in northern Alberta in… Continue reading

Most Read