Canadian Housing Market Report: April 2014

Download the full CREA statistics report for April: here pdf

Report Highlights

  • National home sales rose 2.7% from March to April.
  • Actual (not seasonally adjusted) activity stood 0.3% below April 2013 levels.
  • The number of newly listed homes climbed 2.9% from March to April.
  • The Canadian housing market remains in balanced territory.
  • The national average sale price rose 7.6% on a year-over-year basis in April.
  • The MLS® Home Price Index (HPI) rose 5.0% year-over-year in April.

Bank Commentary

bmoBMO Economics: Outside a few lingering hotspots, Canada’s housing market is stable, if not boring, which is good in the face of dire warnings about a crash. But there is a clear East-West split. Strong population growth and healthy economies are driving markets in Alberta, B.C, Saskatchewan and Greater Toronto, while the opposite appears to be weighing on activity in Quebec and much of Atlantic Canada. (Read full commentary)

RBCRBC Economics:  Recent trends show that local markets across Canada head in different directions. Calgary, Edmonton (notwithstanding small setbacks in April in both cases), Toronto and increasingly Vancouver are firmly engaged in an upward trajectory, whereas markets east of Toronto—including Montreal and Ottawa—struggle to shake off their winter blues.

Despite the fact that the majority of local markets remain balanced,‘national’ home prices have risen faster than we expected so far this year. Hefty price gains recorded in Calgary and, especially, Toronto,exerted substantial influence on the national scene. In light of the price developments to date, we are boosting our forecast for 2014 to an increase of 3.4% at the national level, up from 2.1% previously. We continue to expect some moderation to take place later this year and well into next.   (Read full commentary)

TDTD Economics: In the near-term, housing demand is likely to continue to ramp up as an increase in the number of listings on the market and a recent decline in mortgage interest rates helps unleash some pent-up demand that accumulated over the winter months.

While existing home prices continue to exhibit more momentum than was originally expected, TD expects that price growth will move more in line with incomes over 2014 and 2015 as listings pick-up over the next few years giving buyer’s more choice and bargaining power. However, the risk is that prices re-accelerate as the spring market heats up. Market updates by individual municipal real estate boards (for example, The Toronto Real Estate Board) are slightly inconsistent with CREA’s view that housing markets are well entrenched in balanced territory. Surveys show that bidding wars remain common in many major cities like Toronto, Vancouver and Calgary, which is why prices are continuing to grow at an uncomfortably hot pace. With prices outpacing the average Canadian household income, record low interest rates could lead to more accumulation of froth in a market already estimated to be 10% overvalued.  (Read full commentary)

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