Photo: Ryk Neethling/Flickr
Following a pick-up in market activity in the late summer and early fall, the Canadian housing market has slowed in October according to a report published today by the Canadian Real Estate Association. (Tweet this)
The number of home sales processed through the MLS and other co-operative listing systems fell 3.2 per cent month-over-month in October. The decline returned activity to near where it stood in June and July 2013.
Sales were down in over half of all local markets, including the Greater Toronto Area, the Greater Vancouver Area, Hamilton-Burlington and Montreal.
Despite the declines, CREA indicated that Canada’s housing market remains in “balanced territory.”
“October’s lower activity provides early evidence confirming that sales in the later summer and early fall were boosted by homebuyers with pre-approved mortgages at lower than current interest rates jumping into the market before their preapprovals expired,” said Gregory Klump, CREA’s Chief Economist.
“Now that interest rates appear to be going nowhere fast, sales activity in the near term may be held in check by homebuyers who are in less of a hurry to purchase. While the Finance Minister will no doubt continue to keep a close eye on Canadian housing markets for signs of overheating as interest rates remain low, October sales results may provide him with reassurance that tightened mortgage regulations and lending guidelines are working as intended.”
With this, Klump is likely alluding to Finance Minister Jim Flaherty’s comments made earlier this week in which he said that the government is keeping a “sharp eye” on the Canadian residential real estate market.
“I’ve intervened four times in the last several years and I’ll intervene again if I have to,” he said, referring to last year’s move to tighten mortgage lending rules to cool what he viewed as an overheated market.
Here are a few more highlights from the CREA report:
- Actual (not seasonally adjusted) home sales activity rose 8.2 per cent year-over-year in October 2013.
- Sales were up on a year-over-year basis in just over half of local markets, including Greater Vancouver, Greater Toronto and Calgary.
- The number of newly listed homes fell by 0.8 per cent from September to October.
- The MLS Home Price Index rose 3.5 per cent year-over-year in October.