Home sales in Canada continue to rise. After a mild decline in summer 2010 (with the low point in July), sales have grown steadily for three consecutive months. According to the Canadian Real Estate Association (CREA), seasonally adjusted sales on MLS grew by 4.6% in October, following similar increases in August and September. After the rollercoaster ride of the last three years, the Canadian real estate market finally seems to be balanced between buyers and sellers.
However, sales activity was down 21.6% compared to the record-setting numbers of October 2009. Gregory Klump, CREA's chief economist, believes that "national sales activity is now running almost halfway between the highs and lows posted between late 2008 and late 2009."
The introduction of HST in Ontario and BC significantly affected the strongest Canadian real estate markets in Toronto and Vancouver. Buyers were also aware of the upcoming interest rate hikes and new mortgage regulations, thus shifting their demand to winter and spring 2010.
New listings level and average price level are starting to level off towards the year 2011, when the levels are expected to be cooler and steady. The average price for a home in Canada reached $343,747, growing less than a percentage point compared to the previous year. However, this is $12,000 more than in September 2010. The Toronto and Vancouver real estate markets recorded the highest monthly sales increases; however, it is not very probable that we will meet the annual sales level of 2009. The Canada Mortgage and Housing Corporation (CMHC) expects about 438,400 existing homes to be sold the next year, slightly below the 2010 level.
Despite solid employment levels, housing starts will continue to decline to meet demographic fundamentals, finishing the year at around 186,200 starts and going down to around 174,800 units next year, according to CMHC.