Housing market shows few signs of long-feared hard landing
All that talk of a hard landing for Canada’s housing market seems a distant memory now. The latest monthly data on existing home sales from Canada’s two biggest markets — Toronto and Vancouver — suggest demand for housing is still alive and well. Existing homes sales in the Greater Toronto Area rose 30% in September from a year ago and a strong third quarter has the market about even with 2012 now, reports the Financial Post‘s Garry Marr.
The Toronto Real Estate Board said there was 7,4ll sales through the Multiple Listing Service in September, up from 5,687 sales a year ago. It was also up from the 6,249 in sales in August. For the first nine months of the years, sales are now down 1% compared with the same period in 2012. Meanwhile, home sales in the Vancouver region were up nearly 64% in September as the market posted big gains compared with a year ago when sales plunged in the wake of changes to mortgage lending rules.
The Real Estate Board of Greater Vancouver said Wednesday there were 2,483 sales through its Multiple Listing Service in September, up from 1,516 a year ago. The Vancouver figures come with one important caveat, though, according to board president Sandra Wyant: “While sales are up considerably from last year, it’s important to note that September 2012 sales were among the lowest we’ve seen in nearly three decades. Home sale and listing activity this September were in line with the 10-year average for the month.” Real estate sales have bounced back strongly in recent months compared with a year ago when federal Finance Minister Jim Flaherty tightened the mortgage lending rules.
Canadian housing market remains strong
Canada’s housing market already topped what economists had expected for the spring and summer, and could do it again this fall.
Local real estate boards are beginning to release September’s data, and the numbers so far are strong. Toronto, Calgary and Vancouver are all reporting solid year-over-year increases.
“People are talking about whether the market’s had a hard landing or a soft landing, but so far there’s no landing whatsoever,” said Canadian Imperial Bank of Commerce economist Benjamin Tal. “My sense is that activity is too strong for the liking of regulators, and maybe the government. The market is stronger than it should be at this stage of the cycle.”
He suspects that some of the strength still stems from prospective homebuyers deciding to jump into the market now to lock in low mortgage rates before they rise further. “Part of what we’re seeing now is people stealing activity from the future, out of fear of higher interest rates.”