Sales and listings figures in Canada suggest hot property market is cooling

Canadian residential sales have dropped

Residential property sales dropped slightly in Canada while listings increased, giving rise to suggestions that the country’s hot real estate market is showing signs of cooling.

The latest figures from the Canadian Real Estate Association (CREA) shows that sales in April dropped 2.6% from the previous month and are now 6.8% below the peak reached in December 2009.

Sales activity via the Multiple Listing Service Systems of Canadian real estate Boards numbered 52,042 units in April, less than 1% short of the record for national sales activity during the month of April, which was set in 2007. Compared to April 2009, national activity was up 20%

More than half of the decline in activity over the first four months of 2010 resulted from fewer sales in British Columbia, while activity in Ontario and Quebec remains at or near record levels.

‘The easing trend in national sales activity masks a rising trend in a number of major markets. Real estate is local, so buyers and sellers should engage the services of a realtor for knowledge about housing market trends in their market,’ said CREA President Georges Pahud.

The national average price of homes sold rose 12.2% over this time last year, a smaller increase compared to those recorded over the past eight months. But bucking the national trend, price gains continue to increase in a number of major markets in Alberta, Ontario and Quebec.

With last year’s string of downwardly skewed average price values having now mostly passed, and with activity in British Columbia’s lower mainland having settled down, year-over-year national average price comparisons are coming back into line with changes in the national weighted average price, the report says.

The actual, not seasonally adjusted, number of months of inventory stood at 4.5 months in April, down from 5.6 months a year ago and 4.7 months in April 2008, but up compared to April levels from 2004 through to 2007. On a seasonally adjusted basis, months of inventory stood at 5.3 months in April, the highest level since last May.

‘Next month will mark the passage of one year since the national average price rebounded from the recessionary trough to return to the pre-recession peak, so the rise in the national average price is expected to be more subdued next month,’ said CREA chief economist Gregory Klump.

‘The national average price could potentially be skewed higher over the next couple of months if buyers of higher priced homes in Ontario and British Columbia move their purchase decision forward to beat the introduction of the HST in July,’ he added.

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