Real estate market becoming more balanced in Canada in post credit crisis era
Overall property sales are slowing in Canada but some locations, most notably Toronto, are seeing gains in what is regarded by experts as a more balanced real estate market.
With rising activity in Toronto offset by lower activity in Vancouver, the number of homes sold through the Multiple Listing Service systems of Canadian real estate boards edged lower in February. In recent months, national sales activity has slowed while new listings continue to rise, resulting in a more balanced national resale housing market, it is claimed.
According to statistics released by The Canadian Real Estate Association, seasonally adjusted national home sales edged down 1.5% in February.
Activity declined mostly in Vancouver, but this was offset by an equally large gain in Toronto. Sales were also down in a number of other British Columbia housing markets. Since there were no significant gains in sales activity elsewhere in Canada, the national figure for sales activity was pulled slightly lower.
‘The Olympic Winter Games may have impacted February sales activity in British Columbia, so activity for the province in March will be closely watched,’ said CREA President Dale Ripplinger.
‘Activity is expected to remain elevated in Ontario and British Columbia over the first half of the year, with buyers looking to beat the introduction of the HST and expected interest rate hikes,’ he added.
Across the country, actual, not seasonally adjusted, residential sales activity was up 44% in February compared with the same month last year. New records for February activity were set in Ontario and Quebec. But the year over year gain in national activity was smaller than those of the previous three months.
The residential average price in Canada’s major markets was up 18.7% year over year in February. The seasonally adjusted number of new listings across Canada climbed another 2.4% on a month over month basis in February to reach 73,849 units, the highest level since October 2008. Five consecutive monthly increases have lifted new listings 16.3% above where they stood last September, when they had fallen to the lowest level since late 2005, the data also shows.
As with sales activity, new listings in February 2010 were up most in Ontario and down most in British Columbia. Strong resale housing demand continues to draw down inventories, but supply is shrinking at a decreasing rate because of slightly softer sales activity and an increase in new listings in recent months.
‘Housing markets are becoming more balanced. There are still a number of major markets where sales negotiations favour the seller due to a shortage of inventory, but supply has begun rising. Further expected supply increases will continue to take the steam out of housing markets as the year progresses,’ said CREA Chief Economist Gregory Klump.