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.”

Just Posted

WATCH: Rappelling down Red Deer’s Stantec Building a thrilling, scary experience

Advocate reporter chronicles his trip down the 13-storey buildling

Red Deer raises $60,000 for Make-A-Wish Foundation

27 brave residents rappell down Stantec Building

People hurt in rollover near Red Deer

Occupants of a vehicle that rolled south of Hwy 11A were airlifted… Continue reading

Eager-beaver cannabis entrepreneurs already waiting outside Red Deer City Hall

Appications will be accepted on a first-come basis starting on Tuesday

Like father like son: Red Deer area Dreeshen family dedicates life to public service

There are three jobs that could be considered the Dreeshen family business:… Continue reading

WATCH: Gazebo groundbreaking in Waskasoo

Fifty per cent of the $100,000 project is funded by a provincial government grant

Evacuation numbers remain at nearly 1,000 as B.C. wildfires rage on

SUMMERLAND, B.C. — Officials in British Columbia’s Okanagan region hope that fire… Continue reading

Survivors recount deadly Missouri duck boat sinking

BRANSON, Mo. — “Grab the baby!” Those were the last words Tia… Continue reading

HMCS St. John’s to return to Halifax after six-month deployment overseas

HALIFAX — The countdown is on for the homecoming of a Halifax-class… Continue reading

Trump says lawyer taping him may be ‘illegal’

BRIDGEWATER, N.J. — The Latest on President Donald Trump and his onetime… Continue reading

Spieth part of 3-way tie for British lead as Woods lurks

CARNOUSTIE, Scotland — Jordan Spieth has a share of the lead in… Continue reading

WWII hero’s lost Purple Heart returned to his family

NEW YORK — A lost Purple Heart medal has been returned to… Continue reading

California girl, 2, accidentally shot and killed by boy, 4

SAN BERNARDINO, Calif. — Authorities say a 4-year-old boy accidentally shot and… Continue reading

A hairy issue: Sailors tell the US Navy, ‘We want beards’

PROVIDENCE, R.I. — Now that women in the Navy can wear ponytails,… Continue reading

Most Read


Five-day delivery plus unlimited digital access for $185 for 260 issues (must live in delivery area to qualify) Unlimited Digital Access 99 cents for the first four weeks and then only $15 per month Five-day delivery plus unlimited digital access for $15 a month