Home sales decline in May!
June 16, 2010
Madhavi Acharya-Tom Yew
Business Reporter
Home sales and prices fell in May as would-be buyers felt the pinch of changing regulations and higher interest rates.The decline is a “departure from the normal seasonal pattern,” the Canadian Real Estate Association noted in its release Wednesday.
It’s likely that changes to mortgage regulations and rising interest rates pulled forward a number of sales into April that would have otherwise taken place at a later date. “May was the first full month in which sales activity was affected by these changes,” CREA president Georges Pahud said. “An accompanying decline in new listings and housing starts means these changes are also affecting the supply side, which will keep the market balanced and Canadian home prices stable.”
Across Canada, sales fell by 9.5 per cent in May compared to near-record levels of activity in April. While activity declined in more than 70 per cent of local markets, the lower national figure resulted largely from fewer sales in Toronto, Vancouver, and Ottawa, CREA said.
The average resale price fell 1.27 per cent to $340,566 from the record $344,968 reached in May. Still, the national average price of homes rose 8.5 per cent in May from a year ago, though this is a smaller increase compared to the past nine months.
The number of new listing also fell four per cent in May, compared to the previous month – the first decline in eight months and another sign of a cooling Canadian real estate market. “Supply and demand has become more balanced in a number of major markets,” said Gregory Klump, chief economist for the association. The amount of time it takes to sell a home is expected to rise in the coming months, he added. “The outlooks for the Canadian economy, employment, and mortgage market trends remain upbeat, so supply and demand will remain balanced on a national basis. Canada will avoid a U.S.-style home price correction,” Klump said.
Ali=> So, Is this a real decline? Three levels of government trying to get something out of the booming Real Estate market for themselves. Municipalities, specially the one in Toronto with higher land transfer tax and property tax. Province with all kinds of HST, Energy Efficiency Audit and so on, and the Federal Government with all sorts of monetary and financial tools.
I am thinking that Canada has been noticed by the world as a good destination for immigration in the last may be two decades, and recently investors have an eye on Canada due to economic stability specially after Global Financial melt-down. Canadian banks had stayed out of trouble, and it was not because of the policies of existing government, but governments long before this.
Most of the new immigrants end-up in the golden horse shoe area, and mostly GTA. More and more immigrants are coming with lots of money to invest in this country which is very rich with enormous natural resources, so, who can tell me that the prices that are lower than anywhere else in the industrial world, would not go up again and fast soon?