You would have to have your head in the sand to not have heard about the potential housing bubble developing in Canada. We’ve heard about many causes: low interest rates, the home renovation tax credit, loose mortgage rules and the impending introduction of the HST. *Deep breath* So here’s one more cause to add to the list: lack of supply.
Homeowners are getting greedy and holding out on listing their homes. Waiting with baited breath to see just how long they can ride the equity profit gravy train. Toronto housing listings are down 41% this January from last year. Saskatoon saw 37% fewer listings, Victoria and Ottawa both experienced 30% decreases.
So what are buyers buying? NEW HOMES!
New home sales in the GTA more than doubled in January compared with the same month last year, according to figures released Wednesday by the Building, Industry and Land Development Association. Yourhome.ca
That being said, last January was arguably the pinnacle of the financial crisis.
But a cautionary warning to sellers: once the HST is introduced and interest rates increase in the summer, prices may go down. Listing your home now might not be the worst idea.