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Ottawa, ON, December 15, 2015 – According to statistics released today by The Canadian Real Estate Association (CREA), national home sales were up on a month-over-month basis in November 2015.

Highlights:

• National home sales rose by 1.8% from October to November.
• Actual (not seasonally adjusted) activity was up 10.9% compared to November 2014.
• The number of newly listed homes was up 3.1% from October to November.
• The Canadian housing market remains balanced overall.
• The MLS® Home Price Index (HPI) rose 7.1% year-over-year in November.
• The national average sale price rose 10.2% on a year-over-year basis in November; excluding Greater Vancouver and Greater Toronto, it increased by 3.4%.

The number of homes trading hands via MLS® Systems of Canadian real estate Boards and Associations rose by 1.8 percent in November 2015 compared to October to reach its highest monthly level in six years.

There was a fairly even split between the number of markets where sales posted a monthly increase and those where sales declined. The national increase was again led by monthly sales gains in the Lower Mainland of British Columbia and in the Greater Toronto Area (GTA).

“Recently announced changes to mortgage regulations will likely boost sales activity in the short term, as buyers jump off the fence to beat the changes before they take effect next year,” said CREA President Pauline Aunger. “Even so, some housing markets stand to be affected by the changes more than others. All real estate is local, and REALTORS® remain your best source for information about sales and listings where you live or might like to in the future.”

“Changes to mortgage regulations taking effect in mid-February next year appear aimed at cooling the Greater Vancouver and Greater Toronto housing markets,” said said Gregory Klump, CREA’s Chief Economist. “Minimum down payments will be going up for homes that sell for more than half a million dollars, so larger more expensive housing markets will be affected most. Unfortunately, the regulatory changes will also cause unintended collateral damage to housing markets beyond Toronto and Vancouver, including places that are facing economic headwinds from the collapse in oil prices.”

Actual (not seasonally adjusted) sales in November 2015 rose 10.9 percent on a year-over-year basis compared to November 2014 and were up from year-ago levels in two-thirds of all local markets. The increase was again led by the Lower Mainland and GTA. Activity was down sharply in the Calgary region compared to what were historically high levels posted prior to the collapse in oil prices.

The number of newly listed homes rose 3.1 percent in November compared to October, led by the Lower Mainland, Calgary, Edmonton, Kingston and Ottawa.

The national sales-to-new listings ratio eased to 57.3 percent in November compared to 58 percent in October. A sales-to-new listings ratio between 40 and 60 percent is generally consistent with balanced housing market conditions, with readings below and above this range indicating buyers’ and sellers’ markets respectively.

The ratio was within this range in slightly fewer than half of all local housing markets in November. Of the remainder, more markets recorded a ratio above 60 percent than fell below 40 percent. Markets where demand is tight relative to supply are located almost exclusively in British Columbia and Ontario.

The number of months of inventory is another important measure of the balance between housing supply and demand. It represents the number of months it would take to completely liquidate current inventories at the current rate of sales activity.

There were 5.4 months of inventory on a national basis at the end of November 2015, down from the 5.5 months recorded in October and the lowest level in nearly six years. The national figure is being pulled lower by increasing market tightness in B.C. and Ontario.

The Aggregate Composite MLS® HPI rose by 7.11 percent on a year-over-year basis in November – the largest gain in over five years. Year-over-year price growth accelerated for all property types tracked by the index.

Two-storey single family homes continue to post the biggest year-over-year price gains (+8.88 percent), followed by one-storey single family homes (+6.42 percent), townhouse/row units (+5.43 percent) and apartment units (+5.22 percent).

Year-over-year price growth varied among housing markets tracked by the index. Greater Vancouver (+17.83 percent) and the Fraser Valley (+12.36 percent) posted the largest gains, followed closely by Greater Toronto (+10.29 percent).

By comparison, Victoria and Vancouver Island prices saw year-over-year gains that ranged between six and eight percent in November.

Prices edged down by about two percent on a year-over-year basis in Calgary and Saskatoon and fell by nearly five percent in Regina. While the home price declines in Calgary and Saskatoon are a fairly recent trend, prices in Regina have been trending lower since early 2014.

Prices edged higher on a year-over-year basis in Ottawa (+0.68 percent), rose modestly in Greater Montreal (+1.61 percent) and continued to gain strength in Greater Moncton (+4.81 percent).

The MLS® Home Price Index (MLS® HPI) provides a better gauge of price trends than is possible using averages because it is not affected by changes in the mix of sales activity the way that average price is.

The actual (not seasonally adjusted) national average price for homes sold in November 2015 was $456,186, up 10.2 percent on a year-over-year basis.

The national average price continues to be pulled upward by sales activity in Greater Vancouver and Greater Toronto, which are among Canada’s most active and expensive housing markets. If these two markets are excluded from calculations, the average is a more modest $338,969 and the year-over-year gain is reduced to 3.4 percent. Even then, the gain reflects a tug of war between strong average price gains in housing markets around the GTA and the Lower Mainland of British Columbia versus flat or declining average prices elsewhere in Canada. If British Columbia and Ontario are excluded from calculations, the average price slips even lower to $302,477, representing a year-over-year decline of 4.7 percent.

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PLEASE NOTE: The information contained in this news release combines both major market and national sales information from MLS® Systems from the previous month.

CREA cautions that average price information can be useful in establishing trends over time, but does not indicate actual prices in centres comprised of widely divergent neighbourhoods or account for price differential between geographic areas. Statistical information contained in this report includes all housing types.

MLS® Systems are co-operative marketing systems used only by Canada’s real estate Boards to ensure maximum exposure of properties listed for sale.

The Canadian Real Estate Association (CREA) is one of Canada’s largest single-industry trade associations, representing more than 109,000 REALTORS® working through some 90 real estate Boards and Associations.

Further information can be found at http://crea.ca/statistics.

For more information, please contact:

Pierre Leduc, Media Relations
The Canadian Real Estate Association
Tel.: 613-237-7111 or 613-884-1460
E-mail: pleduc@crea.ca

The Bank of Canada announced on April 15^th, 2015 it was keeping its trend-setting overnight lending rate at 0.75 per cent.

While official economic growth statistics for the first quarter of 2015 won’t be available until the end of May, the Bank estimates that Canada’s economy was stuck in neutral. Governor Poloz had already telegraphed as much in an interview with the Financial Times and it should come as no surprise given the impact of the drop in oil prices this year.

In its interest rate announcement, the Bank made it clear that it thinks the worst of the damage to the Canadian economy from lower oil prices is behind us. It expects economic activity to bounce back in the second and third quarters even more strongly than previously predicted due mainly to an anticipated increase in non-energy exports.

The Bank’s forecast is perhaps optimistic regarding near term economic prospects given, since there is scant evidence that non-energy exports are in fact ramping up. Moreover, its Monetary Policy Report (MPR) which accompanied the announcement acknowledged that “the full impact of the decline in oil prices has yet to show up in employment statistics.”

The rebalanced forecast allows the Bank to maintain its view that inflation will return to its two per cent target by the end of 2016. At this point, that means the goalposts for the first interest rate hike have not moved. Most Bay Street economists expect the Bank to keep interest rates on hold until late 2016.

That said, the Bank identified greater than anticipated economic fallout from oil prices as the number one risk to its forecast. If damage to the Canadian economy from lower oil prices worsen or drag on for longer than anticipated, it may be forced to again downgrade its next economic forecast and perhaps trim interest rates in July.

As of April 15^th, 2015, the advertised five-year lending rate stood at 4.64 per cent, down 0.1 percentage points from the previous Bank rate announcement on March 4^th, and down 0.35 percentage points from one year ago.

The next interest rate announcement will be on May 27^th, 2015. The next update to the Monetary Policy Report will be on July 15^th, 2015.

(CREA 04/15/2015)

The further decline in oil prices since CREA’s last forecast has shaken consumer confidence in the Prairies, pushing potential homebuyers to the sidelines and prompting more homeowners to put their home on the market. This has led to a rapid shift in market balance in Alberta, and to a lesser extent, Saskatchewan. Annual sales in these provinces are expected to come in well below elevated levels posted last year, with small declines in average residential prices in 2015.

Additionally, the Canadian dollar has weakened further against the U.S. dollar, mortgage rates have declined and the U.S. economy has strengthened since CREA’s last forecast, which taken together are expected to benefit economic and job growth in other provinces. Accordingly, CREA has upwardly revised its forecast for sales activity for much of the rest of the country.

The balance between supply and demand continues to tighten in British Columbia and Ontario. These are the only two provinces where tight supply relative to demand is expected to result in average price gains that surpass inflation this year.

By contrast, average prices in Quebec and the Atlantic region are expected to remain relatively stable, as sales deplete elevated levels of supply.

On balance, the forecast for national sales has been revised lower, reflecting downward revisions to the outlook for sales in Alberta. National sales are now projected to reach 475,700 units in 2015, representing an annual decline of 1.1 per cent. This would place annual activity slightly above but still broadly in line with its 10-year average (Chart A).

British Columbia is projected to post the largest annual increase in activity in 2015 (+4.9 per cent) followed closely by Nova Scotia (+3.7 per cent), Quebec (+2.5 per cent), New Brunswick (+2.5 per cent), Ontario (+1.9 per cent), and Prince Edward Island (+1.4 per cent). These numbers represent upward revisions to CREA’s previous forecast.

Alberta is expected to post the largest annual decline in sales this year (-19.2 per cent), though the trend for activity is expected to begin recovering from a weak start to the year as consumer confidence recovers. Sales are also forecast to decline on an annual basis in Saskatchewan (-11.2 per cent), and Manitoba (-1.3 per cent).

The national average home price is now forecast to rise by two per cent to $416,200 in 2015. Only British Columbia (+3.4 per cent) and Ontario (+2.5 per cent) are forecast to see gains in excess of the national increase.

Prices are projected to remain largely stable elsewhere, with increases or decreases of around one per cent or less this year. The exception is Alberta, where average price is forecast to fall by 3.4 per cent, reflecting a pullback in sales for luxury properties compared to homes in more affordable price segments.

In 2016, national sales activity is forecast to reach 482,700 units, representing an annual increase of 1.7 per cent. Much of the annual increase reflects an anticipated recovery for sales activity in Alberta and Saskatchewan in line with expected economic improvement in those provinces.

Strengthening economic prospects are expected to result in improving sales activity in other provinces where sales have struggled, keeping prices more affordable amid ample supply. Meanwhile, anticipated mortgage rate increases are expected to keep activity in check in markets where homes are already less affordable and prices have continued rising.

The national average price is forecast to rise by a further 1.9 per cent to $424,100 in 2016. Given an ongoing shortage of supply for single family homes in and around the Greater Toronto Area, price growth in 2016 is forecast to be strongest in Ontario (+2.5 per cent) and Alberta (+2.4 per cent).

Gains of around two per cent are forecast for British Columbia and Manitoba, and around one per cent for Saskatchewan and Quebec. Average home price in the Atlantic region is forecast to hold steady in 2016.

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About The Canadian Real Estate Association
The Canadian Real Estate Association (CREA) is one of Canada's largest single-industry trade associations, representing more than 109,000 real estate Brokers/agents and salespeople working through some 90 real estate Boards and Associations.

For more information, please contact:

Pierre Leduc, Media Relations
The Canadian Real Estate Association
Tel.: 613-237-7111 or 613-884-1460
E-mail: pleduc@crea.ca