Elevated supply levels placed downward pressure on prices in December.
With the focus shifting toward the holiday season, December sales activity slowed to 878 units in the city, 18 per cent below last year at this time and well below the five and 10-year averages. As a result, the unadjusted benchmark price dipped to $448,800, a 0.42 per cent decline over the previous month and 2.33 year over year. December followed a pattern established early on in 2015, which was characterized by slower housing demand.
Economic uncertainty, followed by weak economic conditions and job losses, contributed to slowing housing demand throughout the year. While aggregate prices trended down in 2015, it was not to the same extent as some had speculated. Supply levels were low moving into this cycle and thus provided some cushion to absorb the inventory gains.
In December, monthly inventory levels declined, as expected, to 4,336 units. Yet they were still 28 per cent higher than the same time last year, and at the highest December level recorded since 2008. Inventory levels were notably up in both the apartment and attached sectors, which neared the highest December total on record.
December showed that buyers in this market are continuing to be much more cautious as the impact of further oil price declines weighs on their confidence. Some sellers, meanwhile, are concerned about what supply levels may look like next year and are not delaying their decisions. On an annual basis, sales activity declined by 24 per cent in the detached sector and 33 and 28 per cent in the apartment and attached segments, respectively. While months of supply in 2015 trended higher in all sectors, the apartment was the only one to average above four for the entire year. As a result, the apartment sector was also the only one to record an annual decline in average benchmark price, by 0.82 per cent. While December prices for both the detached and attached sectors were 1.91 and 1.29 per cent lower than levels recorded at the beginning of 2015, on an annual average basis, they remained 1.35 and 1.84 per cent above 2014 numbers.
Aggregate statistics often do not provide the full story as activity varies by product type, price ranges and location. While prices have trended down this year citywide, there are some areas of the city where prices for detached homes have improved compared to the start of the year.