National agency revises year’s sales forecast | Homes & Condos

Monday, August 23, 2010  

National agency revises year’s sales forecast

Last Updated: August 21, 2010 2:11pm

The Canadian Real Estate Association has revised its expectations for national home sales, due to a cooling of month-to-month home resales since the beginning of the year.

The revision should finally put to rest any fear Canada’s housing market was on the verge of a U.S. style bubble.

The fear of a bubble was due almost entirely to over-heated sales in Ontario and B.C. as buyers rushed to beat the introduction of a Harmonized Sales Tax (HST) on July 1.

Since then, sales have dropped off dramatically in both provinces with declines in B.C. (-14.1%) and Ontario (-8%) accounting for 85% of the change in national activity in July.

Seasonally adjusted national home sales activity via the Multiple Listing Service (MLS) Systems of Canadian real estate boards was down 6.8% on a month-over-month basis in July.

The national decline was smaller than the previous two months, as July sales in the Prairies and Quebec came in on par with June levels, with actual (not seasonally adjusted) national sales activity 30% lower in July 2010 compared to last year’s record July.

However, year-to-date, national sales are up 5.6% compared to the first seven months of last year, although the gap is expected to continue to shrink as the year progresses, since activity rose sharply over the second half of last year, reaching levels that are unlikely to be matched in the final five months of 2010.

“The soft sales figures we’re seeing right now can be attributed in part to accelerated home purchases earlier in the year,” says CREA president Georges Pahud. “Activity may remain at lower levels for some time, but ultimately we expect a more stable market to emerge, with demand coming back into line with economic fundamentals.

“While the outlook for economic and job growth remains generally positive nationally and in all provinces, the pace of the recovery will vary by region.”

Alberta is set to record 55,900 sales this year, up 2.7% from last year, with only a small decline of 0.9% in 2011.

The real estate association repeated it did not see a U.S.-style housing price correction, mostly because of solid mortgage market trends, adding it does not expect a large fluctuation in prices.

 

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About Tariq Sultan
Dear Readers, I am a dedicated Toronto, Ontario based real estate professional who has been successfully meeting and exceeding the needs of his clients for past several years. I am actively involved in the insurance, financing, and mortgage industry. Real estate is not only my career – it is my passion. I strive to continuously provide my clients with exceptional service to ensure they are fully satisfied when it comes to their real estate needs. For any real estate related inquires contact me today, I will be happy to assist you. Best wishes, Tariq Sultan

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