Canadian home sales strengthen again in November

Following some cooling over the summer, housing demand has reaccelerated through the fall. The volume of home sales transactions through November is up 5% from a year earlier, and trending only 3% below the 2007 record year for sales. 

The Vancouver and Toronto CMAs continue to fuel national activity, with sales gains of 7.1% m/m and 3.4% m/m, respectively, in November. Sales appear to be stabilizing at weak levels in Calgary, though the latest slump in oil prices and additional cutbacks in the energy sector could lead to a renewed softening in demand in the new year. 

Ottawa's recent move to increase minimum downpayment requirements on properties valued between $500,000 and $1 million will likely have a modest dampening impact on sales in 2016, particularly for first-time homebuyers in high-priced markets. However, the changes could also provide a temporary boost to demand ahead of the midFebruary phase-in. 

The ability to slow the rapid pace of price increases in the Vancouver and Toronto markets in the near-term may be more limited, given the favourable demographic fundamentals, strong job growth, supply constraints, and foreign buying supporting demand.