In: Real Estate News11 Jul 2010
Marking the second straight month of declining sales, Vancouver home sales figures for June fell 30% below comparable numbers for June, 2009. Even with the decline, the nearly 3000 sales make it the second busiest June on record.
The decline did not surprise most analysts, who had predicted the over-heated market would cool as interest rates rose and qualifying standards for mortgages became more demanding. The size of the decline, however, did surprise the majority of real estate experts, who thought that first-time buyers racing to beat implementation of HST might compensate for a drop in demand among repeat buyers.
In May, nationwide real estate sales fell more than 8% as slightly more than 40,000 units sold across Canada. As in Vancouver, so across the country: Although lower than 2009 figures, and although considerably lower than the record-setting numbers the industry posted last fall, May’s national sales figures rank among the highest in history. May typically stands-out as the busiest month for housing sales as warmer weather releases pent-up demand, especially demand for new homes.
Going into the summer season, experts note that supply and demand have reached equilibrium, so that the market ought to remain relatively steady. They predict neither sharp spikes nor precipitous declines. The balance results from more existing homes coming onto the market. Sellers who had stayed on the sidelines during the recession now are listing their homes, taking advantage of better market conditions, and especially hoping to capitalize on sales of existing homes remaining exempt from HST. Evidence on growth on the supply side—new listings grew nearly 1.3% between May and June, and they shot up more than 31% from May, 2009.
We are seeing continued moderation in Calgary’s home sales in the face of higher mortgage rates, increased inventory levels and a decreasing number of fist-time home buyers entering the market.
Diane Scott, Calgary Real Estate Association board president
[Source: The Globe and Mail]
An anomaly in high-end properties
One anomaly continues to puzzle the experts: As in the super-heated Toronto market, demand for high-end properties—those valued at $1 million(cad) or more—has steadily increased even as demand for and sales of affordable housing have declined. One analyst suggests two reasons: “First,” she says, “the two markets are extremely desirable for American expatriates who are flocking into Canada at unprecedented rates, bringing their wealth with them. Second, the buyer who seriously can look at a high-end property does not have misgivings about slightly higher interest rates and slightly more demanding qualifying standards.”
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