Canadian Housing Market Report: November 2014

Download the full CREA statistics report for November 2014: click here

November 2014 Report Highlights

house•National home sales were unchanged from October to November.
• Actual (not seasonally adjusted) activity stood 2.7% above November 2013 levels.
• The number of newly listed homes edged down 0.4% from October to November.
• The Canadian housing market remains balanced.
• The MLS® Home Price Index (HPI) rose 5.2% year-over-year in November.
• The national average sale price rose 5.7% on a year-over-year basis in November.

Bank Commentary

TD Economics:  The recent plunge in oil prices is likely to temper activity in housing next year. On a regional basis, the drop in oil prices is expected to hamper employment and income growth in commodity driven markets such as Calgary and Edmonton. Prior to the slide in oil prices, these markets were considered front-runners in Canada’s housing market but are now expected to soften over the near-term as the low oil price environment persists.

Outside of these markets, a stable unemployment rate and still low interest rates will remain supportive of housing. That said, a change in sentiment regarding Canada’s economic prospects given the recent drop in oil prices may push some homebuyers onto the sidelines. (Read full bank commentary here pdf )

BMO Economics: The slide in oil prices is going to take some, if not all, of the steam out of Calgary and Edmonton—and it may be doing so already. Sales in Calgary grew a tame 5.5% y/y in November, while new listings jumped 15% y/y. Early-December results from the city are more glaring, with sales flat and new listings popping more than 35% y/y. True, December is a slow month with a small sample, but that, combined with November’s result, is a decent hint that Calgary’s market could be rolling over.

As Alberta-wide economic growth slows below the national average next year, inward migration will likely weaken as well, and flows from other provinces have been adding roughly a full percentage point to population growth in recent years …Canada’s housing market continues to look balanced on a national
basis, with strong price growth still coming from 3 select cities—and suffice it so say that Calgary can be soon crossed off that list. (Read full bank commentary here  pdf)

Royal Bank:  In Calgary, strong back-to-back increases in new listings may have been early signs of a rush to the exit by sellers in light of the sharp drop in oil prices. At this stage, greater supply helps bringing better balance in the very tight Calgary market and should be seen as a positive factor.

Looking ahead, we continue to expect that the next stage of the housing
cycle will be a transition to lower resale levels—closer to the long term average—and that the rate of price increases will moderate. (Read full bank commentary here  pdf)

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