Prices exhibit resilience, record biggest gain since 2006

National home sales declined for a third consecutive month in July, according to statistics released today by the Canadian Real Estate Association (CREA).

The number of homes trading hands via Canadian MLS® Systems fell by 1.3 per cent month-over-month in July 2016. With similar monthly declines having been posted in May and June, national sales activity in July came in 3.9 per cent below the record set in April 2016. (Chart A)

Sales activity was down from the previous month in slightly more than half of all markets in July, led by Greater Vancouver and B.C.'s Fraser Valley. Transactions in these two markets peaked in February of this year, and have since then dropped by 21.5 and 28.8 percent respectively.

Calgary was amongst the top contributors to a slight increase in Canada's New Housing Price Index (NHPI) in December, with prices in the city advancing 0.5 per cent month-to-month.

According to Statistics Canada, the combined metropolitan region of Toronto and Oshawa, as well as the region of Calgary, were the top contributors to a 0.2 per cent increase in the NHPI, with increased material and labour costs contributing to higher prices in Calgary.

Buoyed by net migration, job prosperity and low mortgage rates, MLS® sales in Calgary this year are expected to reach their highest level since 2007, before increasing even further in 2013.

As outlined in the Canada Mortgage and Housing Corporation's (CMHC) annual Calgary Housing Outlook Conference, which took place Nov. 20 at the BMO Centre, Richard Cho, CMHC's senior market analyst for Calgary, said sales in Calgary should increase by almost 16 per cent in 2012 to 26,000 units, rising by another 500 units in 2013 to 26,500.

Calgary, along with Toronto and Oshawa, was a "top contributor" to a 0.2 per cent increase in Canada's New Housing Price Index (NHPI) for June.

According to Statistics Canada, "improving market conditions" along with increased material and labour costs were the main reasons for the rise.

Calgary is one of three cities attributed with contributing to the 0.3 per cent New Housing Price Index (NHPI) in May compared to April.

"The metropolitan regions of Toronto and Oshawa, and Calgary were the top contributors to the increase in May," said a report by Statistics Canada. "The impact of these regions on the overall index was slightly offset by the decrease observed in Victoria."

There were 1,936 residential units sold in Calgary in July representing a 21.3 per cent increase over 2011, a testament to the fact the city continues to buck national housing sale trends.

"Recent mortgage rule changes prompted much discussion of a national housing correction," said Ann-Marie Lurie, CREB® economist.