According to statistics released today by The Canadian Real Estate Association (CREA), national home sales posted their third monthly increase and broke all previous monthly records.

Highlights:

• National home sales rose by 1.5% from February to March.
• Actual (not seasonally adjusted) activity was up 12.2% compared to March 2015.
• The number of newly listed homes fell by 1.4% from February to March.
• The MLS^® Home Price Index (HPI) rose 9.1% year-over-year in March.
• The national average sale price rose 15.7% on a year-over-year basis in March (net of Greater Vancouver and Greater Toronto, it climbed by 10.4 percent year-over-year).

The number of homes trading hands via Canadian MLS^® Systems rose by 1.5 percent month-over-month to set a new all-time record in March 2016. Though sales edged lower in Greater Vancouver (-0.3%) and the Greater Toronto Area (GTA) (-1.8% m-m), both remain near record highs reached the month before. (Chart A)

Sales in March were up from the previous month in about 60 percent of all local markets, including Victoria, Chilliwack, the Okanagan Region, Edmonton, Calgary, Woodstock-Ingersoll, Kingston, Barrie and Montreal.

“Greater Vancouver and the GTA are heading into the spring home buying season with soaring demand and a shortage of listings,” said CREA President Cliff Iverson. “Meanwhile, other major urban markets in Canada are well balanced or are amply supplied. All real estate is local, and REALTORS^® remain your best source for information about sales and listings where you live or might like to in the future.”

“Single family home sales in the Lower Mainland of BC and the GTA set new records for the month of March in the range between a-half and one-million dollars – as did sales above a million dollars,” said Gregory Klump, CREA’s Chief Economist. “Meanwhile, sales below a half-a-million dollars, which were not subject to recently tightened mortgage regulations, are being increasingly restrained in these markets by a short supply of listings. If current sales and listings trends persist, price gains may pick up further this spring.”

Actual (not seasonally adjusted) sales activity was up 12.2 percent from one year ago and set a new record for the month of March. It also stood 14.2 percent above the 10-year average for the month.

It surpassed year-ago levels among nearly two-thirds of all local markets, with B.C.’s Lower Mainland and the GTA contributing most to the year-over-year increase in national activity. Sales in a number of other markets in B.C. and Ontario also posted double-digit gains, with Chilliwack sales double what they were one year ago.

The number of newly listed homes fell 1.4 percent in March 2016 compared to February. The national decline was led by the GTA and Hamilton-Burlington.

With sales up on the month and new listings down, the national sales-to-new listings ratio rose to 61.7 percent in March 2016, the ratio’s tightest reading since October 2009. A sales-to-new listings ratio between 40 and 60 percent is generally consistent with balanced housing market conditions, with readings below and above this range indicating buyers’ and sellers’ markets respectively.

The ratio was within this range in fewer than half of all local housing markets in March and was above the range in a nearly equal number of markets, almost all of which are in British Columbia and Ontario.

The number of months of inventory is another important measure of the balance between housing supply and demand. It represents the number of months it would take to completely liquidate current inventories at the current rate of sales activity.

There were 5.0 months of inventory on a national basis at the end of March 2016, the lowest level in more than six years and a reflection of increasingly tighter housing markets in B.C. and Ontario. The number of months of inventory currently sits at or below two months in the Lower Mainland of British Columbia, the GTA, Hamilton-Burlington, St. Catharines, Barrie, Brantford, Oakville-Milton, Guelph and Woodstock-Ingersoll.

The Aggregate Composite MLS^® HPI rose by 9.1 percent on a year-over-year basis in March 2016 – the biggest gain since June 2010. For the second consecutive month, year-over-year price growth accelerated for all Benchmark property types tracked by the index. (Chart B)

Two-storey single family home prices posted the biggest year-over-year gain (+10.8 percent), followed by townhouse/row units (+8.6 percent), one-storey single family homes (+8.1 percent), and apartment units (+7.3 percent).

Year-over-year price growth continues to vary widely among housing markets tracked by the index, with 9 of the 11 markets tracked by the MLS^® HPI having posted year-over-year price gains in March.

Greater Vancouver (+23.2 percent) and the Fraser Valley (+22.1 percent) posted the largest gains, followed by Greater Toronto (+11.6 percent) and Victoria (+10.8 percent). Meanwhile, year-over-year price growth on Vancouver Island picked up slightly to 7.1 percent.

By contrast, Calgary home prices were down 3.7 percent from where they stood a year ago, while Saskatoon slipped by 2.7 percent. Year-over-year price growth remained in positive territory (+0.5 percent) in Regina and edged higher on a year-over-year basis in Ottawa (+1.2 percent) and Greater Montreal (+1.5 percent). Home prices in Greater Moncton recorded their eighth consecutive year-over-year gain, rising 4.9 percent from where they stood one year earlier.

The MLS^® Home Price Index (MLS^® HPI) provides a better gauge of price trends than is possible using averages because it is not affected by changes in the mix of sales activity the way that average price is.

The actual (not seasonally adjusted) national average price for homes sold in March 2016 was $508,567, up 15.7 percent on a year-over-year basis.

The national average price continues to be pulled upward by sales activity in Greater Vancouver and Greater Toronto, which are among Canada’s tightest, most active and expensive housing markets. If these two housing markets are excluded from calculations, the average is a more modest $366,950 and the year-over-year gain is reduced to 10.4 percent.

Even then, the gain reflects a tug of war between strong average price gains in housing markets around the GTA and in the Lower Mainland of British Columbia versus flat or declining average prices elsewhere in Canada. The average price for Canada net of sales in British Columbia and Ontario was down one percent year-over-year to $299,591.