Canadian Housing Market Report: May 2014

Download the full CREA statistics report for May: here pdf
CREA has also updated their forecast: here pdf

Report Highlights

  • Actual (not seasonally adjusted) activity stood 4.8% above May 2013 levels.
  • Sales increased 5.9% from April to May 2014. This marks the largest month-over-month increase in nearly four years
  • The number of newly listed homes climbed 3.8% from April to May.
  • The Canadian housing market remains in balanced territory.
  • The national average sale price rose 7.1% on a year-over-year basis in May.
  • The MLS® Home Price Index (HPI) rose 5.0% year-over-year in May.

Bank Commentary

TDTD Economics: The combination of a thaw from a long winter and the recent decline in mortgage interest rates was clearly a potent combination for May home sales. Clearly pent-up demand for housing was building overthe 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. 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. (Read full commentary pdf)

bmoBMO: Canada’s housing market continues to look balanced and sturdy overall, but big disparities persist below the surface. One reason policymakers 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 (Read full commentary pdf )

Scotiabscotiaank Economics: Notwithstanding lacklustre job growth and record high home prices, low borrowing costs and aggressive rate discounting continue to lure in home buyers. Sales are also benefitting from pent-up demand generated by a harsh winter, and increased supply as listings improve. Regional conditions remain highly divergent. A strong rebound in B.C., and generally firmer sales in the West, mask relatively softer conditions in Central and Eastern Canada. Sales volumes this year are tracking above 2013 levels in Canada’s four Westernmost provinces, but below in all provinces East of Manitoba. Market conditions are relatively balanced, but favour sellers in some markets. This continues to put modest upward pressure on prices. (Read full commentary pdf )

RBCRBC Economics:  The back-to-back rebound in home resales in Canada in the past two months largely corroborates our earlier suspicion that poor weather  played a central role in dampening housing activity this winter. Bitterly  cold conditions and unusually late arrival of spring in many parts of the  country no doubt kept not only buyers but also sellers on the sidelines
for several months earlier this year.  Better weather in April and (more
so) in May gave the signal for everyone to step back into the game…The more recent evidence on the prices front leads us to believe that the acceleration that we saw since last summer likely has run its course. (Read full commentary pdf )

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