Even though home prices have gone down in Canada, sales remained steady, statistics released by the Canadian Real Estate Association (CREA) showed. From June to July residential property sales activity dropped by .01 percent whereas actual sales went up 3.3 percent as compared to July 2011.
Between June and July, there was a 3.3 percent decline in newly listed homes. A shortfall was also recorded in more than half of all local markets including Montreal, Toronto, Vancouver, the Fraser Valley, Calgary, and Edmonton.
However, it’s the declining sales activity in Greater Vancouver that continues to impact the national average price, though average sales price increased in seven of every 10 local markets.
The CREA report showed that prices are off their recent peaks in Greater Vancouver and Greater Toronto, but remain above year-ago levels in most markets.
These fluctuations in price and sales have largely been attributed to changes in mortgage rates. “Recent changes to mortgage regulations were widely expected to temper sales and prices,” said Wayne Moen, CREA President, in a statement. “Even so, sales and price trends can be very different from one market to the next, and run counter to national trends.”
These statistics are another confirmation of the Canadian real estate market, once considered a hot market for investment, losing steam.
A special report on Canadian Housing by Scotiabank points to cooling of sales and prices in the first half of 2012. The report predicts that the average Canadian home prices will eventually decline a cumulative 10 percent over the next 2-3 years, as housing demand softens and buyers’ market conditions re-emerge for the first time in over a decade. “The correction will be concentrated in the Toronto and Vancouver markets, where supply risks and affordability pressures have the potential to trigger larger price adjustments,” the Scotiabank report said.
Interestingly, the notion of Canada’s housing market facing the sharp downturn witnessed in the .S and Europe has been dismissed in the report.
Meanwhile, the U.S. market saw an increase in home prices while the demand dropped, National Association of Realtors reported. Lawrence Yun, NAR chief economist, said the bigger story is lower inventory and the recovery in home prices. "Despite the frictions related to obtaining mortgages, buyer interest remains solid. But inventory continues to shrink and that is limiting buying opportunities. This, in turn, is pushing up home prices in many markets," he said.
