June Home Sales Proof of Balanced Canadian Housing Market
The Canadian Real Estate Association has released their stats for June, and they are positive! An increase in home sales, and only the smallest declines in other areas prove that while the housing market may have slowed in the last quarter of 2012, and the first quarter of 2013, things are definitely back on track.
On a month-over-month basis, national home sales rose 3.3 per cent in June 2013 from the month before, indicating that while the spring market may have been slow to start, there definitely doesn’t seem to be any stopping it now. Year-over-year those numbers were only down 0.6 per cent from June of last year; and we can’t forget that in June of last year people knew that new mortgage rules were on the way and the frenzy was on to get in while you still could.
There’s also good news for sellers, although perhaps not those still waiting on the sidelines waiting for prices to fall to more affordable levels. That’s because while sales were up, so too were prices. Those rose 4.8 per cent when compared on a year-over-year basis.
But just like mortgage rules were sending buyers flooding into the market during June of last year, increased mortgage interest rates were what did it in June of this year, says Gregory Klump, chief economist at CREA.
“Increases in mortgage interest rates likely prompted some buyers with pre-approved mortgages to jump off the sidelines and into the market in June, particularly in larger, more expensive urban markets where affordability is strained,” he says. “We have seen this happen before. If fixed mortgage rates continue holding where they are or edge slightly higher, sales may ebb over the summer and early autumn, with slightly higher borrowing costs picking up where the finance minister left off last year to keep the housing market in check.”
Of course the real estate market all depends on where you are, and that’s true in this case too. While Greater Toronto and Montreal, two of the most worrisome markets in the country, continue to show declines, Greater Vancouver, Victoria, Calgary, and Edmonton were all areas that showed improvement when compared with stats from June 2012.