Toronto: The number of homes sold in Canada last month hit a record as supply tightened, particularly in the Toronto area, where a fiercely competitive market is dissuading some homeowners from putting their properties up for sale, the Canadian Real Estate Association said Monday.
There were 57,669 homes sold nationwide over the Multiple Listing Service in April, a 10.3 per cent increase from the same month last year, the industry organization said.
The rise in sales came as the number of new homes put up for sale slipped 3.7 per cent from a year ago to 103,028.
That trend was even more pronounced in the Toronto area, where new listings were down 10.3 per cent compared to April 2015.
“While significant home price gains may entice some homeowners in these markets to list their home for sale, the issue for many is that the decision to move means they would also be looking to buy while competition for scarce listings is fierce,” CREA chief economist Gregory Klump said in a statement.
“As a result, many homeowners are deciding to stay put and continue accumulating capital gains. That’s keeping listings off the markets at a time when they are already in short supply.”
Still, CREA says sales in April were up year-over-year in about 70 per cent of all local markets compared with a year ago, boosted by B.C. and the Toronto region.
Compared with March, sales were up 3.1 per cent in April, while new listings declined 0.2 per cent.
Month-to-month figures for Vancouver and Toronto suggest the two frothy markets may be starting to cool, CREA president Cliff Iverson said.
In the greater Vancouver area, April sales were virtually flat from the previous month, up a meagre 0.1 per cent, while in greater Toronto sales climbed 3.2 per cent on a month-to-month basis.
That comes on the heels of a tepid March, when Vancouver and Toronto saw sales fall 0.3 per cent and 1.8 per cent, respectively, from February.
TD economist Diana Petramala says the data suggests that new federal rules that came into effect in mid-February and require larger down payments for homes between $500,000 and $1 million have had some impact on the two markets.
“Activity was down or flat in both for the second consecutive month, suggesting that a soft-landing may be in store for these red-hot markets,” Petramala said in a note.
“Nationally, the effect of the new rules appears to be more than offset by low interest rates. After edging up in the early part of the year, Canadian mortgage rates came back down to record low levels again by March.”
The national average price for homes sold in April rose 13.1 per cent from a year ago to $508,097.
Excluding the greater Vancouver and greater Toronto markets, the average price was $369,222, up 8.7 per cent from April 2015.
The national sales-to-new listings ratio rose to 64.5 per cent in April, the ratio’s tightest reading since October 2009.