National home sales edged up in November, buoyed by the increases in British Columbia and the Greater Toronto Area (GTA), according to the latest figures from the Canadian Real Estate Association (CREA).
There appears to be an even split between the number of local markets where sales activity rose and where sales declined. For instance, BC and GTA's improved sales turnouts were able to offset the slump in Calgary.
Actual activity was up by 11.3% on a yearly basis. On a monthly basis, however, national home sales rose by just 0.6%.
"Sales continue to improve in some regions and not so much in others. The mortgage stress-test doesn't help relieve the ongoing shortage of housing in markets where sales have improved, and it continues to hammer housing demand in markets with ample supply," said CREA president Jason Stephen.
The increase in home sales came with a decline in newly-listed homes. In fact, the number of new listings declined by 2.7%, placing them among the lowest levels posted in the past decade. This slump was attributed to the fewer listings in GTA.
With the limited supply, it is projected that house prices will continue to rise, said CREA chief economist Gregory Klump.
"Home prices look set to continue rising in housing markets where sales are recovering amid an ongoing shortage of supply. By the same token, home prices will likely continue trending lower in places where there's a significant overhang of supply, perpetuated in part by the B-20 mortgage stress-test that continues to sideline homebuyers there," he said.
Given the drop in new listings and higher house prices, the sales-to-income ratio has hit 66.3%, up from the long-term average of 53.7%.
The current housing stock is currently equal to 4.2 months of inventory, the lowest level recorded since the summer of 2007. This is below the market average of 5.3%. While still just within a balanced market territory, this current reading suggests that sales negotiations are becoming increasingly tilted in favour of sellers.
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