Worst of real estate slump in Canada is over
|Tuesday, 16 June 2009|
The residential real estate market in Canada is improving with estate agents reporting improved sales and economists claiming that the worst of the slump is over.
Although January showed declining sales, figures every months since then have been upward. In Vancouver, for example, sales were down 59% in January from a year earlier but last month they were 17% above those in May last year.
Nationally sales have been increasing every month since February. In April sales on a monthly, seasonally adjusted basis jumped 11.2%.
'The worst of Canada's recession occurred through December and January of this year. Things were looking really bleak. It caused people to be cautious. Now, thanks to low mortgage interest rates and a slide in prices buyers are more confident,' said BMO Nesbitt Burns senior economist Michael Gregory.
'The worst is over,' he said but added that it was still too early to talk in terms of a strong and robust recovery.
Bank of Nova Scotia's senior economist Adrienne Warren expects more positive news for June. Most activity is among first-time buyers at the more affordable end of the market, she said. In Calgary, for example, 70% of re-sales in May were on property priced under $400,000.
'First-time buyers are coming in to take advantage of the ultra-low interest rates we're seeing right now,' Warren explained.
The recent growth is due partly to pent-up demand from the end of last year, and observers said this could level off over the summer once that delayed activity has been satisfied, and as rising unemployment continues to temper consumer activity.
In some areas bidding wars are breaking out again. According to Pamela Allen, a Re/Max real estate agent in Vancouver, she is busier than she has been all year. 'My last three buyers all lost their offer because they were in a bidding war,' she said.
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