For some, the real estate market is “out of its slump.” For others it is simply “stabilizing.” Others still see “no signs of cooling.”
The varying pronouncements about Canada’s housing markets in mid-July suggest that there isn’t per se a single housing market, but instead a collection of local markets where prices and sale volumes adjust to local variations in housing demand and supply, sometimes in response to institutional interventions.
The latest release of the monthly housing statistics by the Canadian Real Estate Association (CREA) suggests that a “national” Canada-wide lens on housing markets shows a picture that is necessarily not reflective of any local housing market. Whereas the national housing market is the sum of its parts, it’s the parts that matter because consumers do not see or experience the national averages. Housing prices and sales volumes are inherently relevant only at local levels.
Whereas month-over-month comparisons are interesting, given the cyclical nature of housing markets, year-over-year comparisons are more meaningful. Hence, the 4.1 per cent increase in sales volume observed in June 2018 over May might suggest an upswing in national housing markets. Yet, it is obfuscating the larger underlying market dynamic: A comparison with June 2017 reveals a decline of 6.6 per cent in national housing sales.