July 15, 2010
According to stats recently released by CREA, the number of resale home transactions in Canada dropped 19.7% in June 2010 from June 2009.
The stats are based on data from the Multiple Listing Service and do not take into account the sale of new construction homes as well as transactions ‘by owner’ that bypass the MLS.
Price increases are also beginning to slow. The national average price of homes sold via Canadian MLS Systems rose 4.9 per cent on a year-over-year basis in June to $342,662. Keep in mind, however, average prices reported by CREA are often skewed.
According to CREA, tightened mortgage regulations and anticipated interest rate increases are what’s currently cooling sales activity.
“National home sales activity is easing due to fewer and more cautious first-time home buyers,” said Chief Economist Gregory Klump. “With interest rates on the rise, housing affordability and home sales activity are expected to continue to erode over the second half of 2010. While the pricing environment is becoming more challenging, a recovering economy and job market will provide support for housing activity and prices.”