April home sales show Canadians have largely adapted to B-20

Recent sales activity might indicate that the national market has already acclimated to the largest impacts of B-20, according to Bank of Montreal chief economist Doug Porter.

“Canadian housing activity appears to be broadly stabilizing, as there are signs that the market has largely digested the many policy changes,” Porter wrote in a report, as quoted by The Canadian Press.

“And while the regional divide is wide, fundamentals look to be a bit more supportive in the year ahead, with the policy tightening likely having run its course, job growth surprisingly solid and borrowing costs ebbing.”

This is despite the policy regime’s dampening effect, which was most visible in the country’s most in-demand markets. Earlier this month, Toronto-Dominion economists estimated that B-20 led to around 40,000 fewer transactions nationwide (on a year-over-year basis) during Q4 2018.

The BMO analysis came in the wake of the latest numbers from the Canadian Real Estate Association, which indicated that overall sales activity increased by 3.6% month-over-month in April.

Canada’s residential sales volume also enjoyed its first annual increase (at 4.2%) since December 2017. During the same time last year, activity declined to a seven-year low for the month.

The CREA report added that Toronto and Montreal numbers compensated for somewhat lacklustre activity in B.C. last month.

Supply also grew by 2.7% in April, following the 3.4% increase seen during the month before that. The national sales-to-new listings ratio was at 54.8%, from the 54.3% in March.

As for sale prices, the nationwide average crawled up by 0.3% year-over-year to reach $494,978. Excluding Toronto and Vancouver, the figure was just slightly over $391,000.


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