Canada property prices post record number of sellers
Attractive property prices have motivated a record number of sellers in Canada with almost 100,000 new listings making last month the busiest month on record, according to the Canadian Real Estate Association.
Prices have rebounded 17.6% in a year after falling off through the recession prompting more activity in the real estate market. There were 97,663 homes put up for sale last month, a 20% jump from the previous high in March 2008, the figures show.
A total of 233,402 listings have been booked since the beginning of the year, the most for any first quarter on record, the data also revealed.
Calgary saw the steepest increase in listings, up 43.3% while they increased by 30.8% in Alberta. ‘The rise in new listings means that buyers may shop around more before making an offer,’ said CREA president Georges Pahud.
New listings are important because they can help moderate sharp price increases that occur in a sellers’ market as buyers are forced to compete for what little is available. It’s still a tight market and economists suggest that could change quickly after the spring rush, with properties taking longer to sell for the rest of the year and prices likely to edge lower.
‘Rising supply and slowing activity will take the steam out of the pricing environment following upbeat sales this spring. Things are still tight, but they are much better than even a few months ago,’ explained CREA economist Gregory Klump.
Sales increased 40.8% from last March and 1.4% month-over-month, although they have slowed slightly when looked at on a quarterly basis. In the first quarter, seasonally adjusted sales fell 3.4% from the fourth quarter of 2009 when a sizzling market spurred talk of a bubble among economists and pushed the federal government to enact tougher mortgage rules to ensure consumers would be able to afford their mortgages should interest rates rise.
‘We expect sales to remain brisk through the key spring season, given improving labour market conditions and still low financing costs. However, this should give way to more subdued activity in the second half of the year, as higher borrowing costs and high home prices erode affordability,’ said Scotia Capital economist Derek Holt.