The residential real estate market in Canada is showing signs of improvement after slowing noticeably over the summer months but it still a long way from the highs of late 2009, the latest market report shows.
Sales activity so far this year has eclipsed last year’s level in 11 of the country’s 19 largest real estate markets, according to the report from Re/Max. On average, prices have been moving lower since peaking earlier in the spring, but over a longer time frame, prices are up across the board, with five areas reporting double digit gains since the start of the year. Prices are up in all cities, with Vancouver, St. John’s, Sudbury, Winnipeg and the Toronto area all experiencing double digit jumps.
And despite a lot of hype, the threat of higher interest rates, tighter lending policies and the introduction of the harmonized sales tax (HST) in Ontario and British Columbia had only a negligible impact on the market, Re/Max said.
‘2009 defied logic in terms of residential housing activity. It was the best of times, it was the worst of times. We cleaned up in the first quarter of 2010 because housing activity during the same period one year earlier was dismal,’ said Elton Ash, regional executive vice president, Re/Max Western Canada.
‘We’re now comparing the second half of the year to 2009 and falling short of expectations. Looking at the big picture however, the market remains healthy,’ he added.
The rest of the year though is expected to be softer. ‘The outlook for the residential housing market has vastly improved over the past three months. Yet, markets are expected to record softer sales activity in the final quarter of the year in comparison to the same period in 2009,’ the report says.
Slowly improving economic data, rebounding commodity and equity markets and a steady supply of new homes for sale will help, the report adds.
The luxury end of the market has performed the strongest, seeing a surge of 20% or more. Some 68% of markets saw upscale home sales climb in excess of 40%, while 21% boasted triple digit gains.
‘If anything demonstrates the underlying health of the national housing picture, it’s the surge in sales of luxury properties this year,’ said Michael Polzler, Re/Max’s executive vice-president for Ontario and Atlantic Canada.
‘We know from experience that this segment of the market is usually the first to show pressure cracks when a market is softening and that has certainly not been the case this year, even during the summer slowdown,’ he explained.