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Home resales cool, listings climb
Residential sales slipped 2.6 percent from March.
Canadian home resales slowed in April from the previous month while new listings climbed, suggesting the country's real estate market could soon start to cool after a year of surging prices. Even so, sales of existing homes still showed a big jump from the same month last year, according data on Monday from the Canadian Real Estate Association, with prices rising at a double-digit pace year over year.
Residential housing has become an important driver of the Canadian economy, even during the recession, spurred partly by low interest rates. It also gave rise to a fiery debate on whether the housing sector was forming a bubble, a charge that policymakers swiftly downplay.
All told, 42,078 homes changed hands in April, up 20.1 percent from the same month last year. But sales slipped 2.6 percent from March, the third decline in four months, and have fallen 6.8 percent from the peak reached in December.
The cooler pace of activity is in line with a long-held view by many economists, who see the market slowing after the spring as more homes are put up for sale and interest rates begin to rise.
Some homeowners may also move sooner in order to avoid extra costs associated with new, harmonized sales tax (HST) regimes, set to begin July 1 in Ontario and British Columbia, and this could add to a front-loaded year of sales and pricing activity.
"Prices may see one last uptick in the next few months, but are expected to simmer down notably in the second half," said Doug Porter, deputy chief economist at BMO Capital Markets.
"Indeed, outright price declines are certainly a very real possibility in Ontario and B.C. amid much more moderate activity after the HST kicks in."
CREA said a slowing market in British Columbia was responsible for more than half the decline for the year. Ontario and Quebec, two of the country's larger markets, remained close to record levels in April.
The number of new listings rose to 99,901, surpassing the previous April record, set in 2008, by 0.6 percent. The average national price rose 12.2 percent to C$344,968 ($331,700). The rising supply of homes for sale could dampen prices in the months ahead. Sales may also cool as higher mortgage rates and rising prices chip away at demand, and overall housing investment falls into line with the broader economic recovery.
"The pace of moderation is expected to be measured and orderly," said Millan Mulraine, a senior strategist at TD Securities.
Source: Canadian Real Estate Association
May 18, 2010 in Canadian Real Estate Market | Permalink
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Comments
Interesting real estate blog. I have bookmarked for future reference. Hope to see such good things again.
Posted by: Coconut Grove Houses | Jun 22, 2010 3:18:40 AM
All the markets are same... It goes in a cycle.
Posted by: Steve | Jun 16, 2010 11:34:59 PM
I'm currently working with an assortment of Buyers and most are willing to wait for the right property at the right price. If a Buyer is going to overpay, they definitely what to make sure they get something.
Posted by: Don Edmunds | Jun 16, 2010 3:37:37 PM
We need an increase in mortgage rates to bring some much needed change to the rising house prices. thanks for the info
Posted by: Don Edmunds | May 31, 2010 11:09:11 AM
The society is facing problems with such laws. This has to go legal and it’s needed to be sorted at the earlier.
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