Real estate market in Canada to cool down for the rest of 2010

The latest data from the Canadian Real Estate Association (CREA) indicates that sales of existing property in Canada improved in August and activity jumped at an impressive pace of 4.1% last month.

The report also showed that activity in the real estate market considerably increased most in Ontario and British Columbia. As CREA says, these two provinces accounted for most of the improvement in national sales acitivity last month, Propertywire says.

Notably, seasonally adjusted sales activity either increased or remained stable in over half of all provinces accros the country and transactions are up 2.2% compared to the first eight monts of 2009. It is worth reminding that activity increased sharply and reached record high over the second half of last year. However, CREA warns that sales activity will cool down in the rest of 2010 and will be lower than the level in 2009. The average price of a home sold last month was $324,928, which is on par with the same month last year at $324,843.

By the way, average prices increased or remained stable in nearly two thirds of all local markets on an annual basis, but growth is shrinking in most active and priciest markets in the country. According to Gregory Klump, CREA’s chief economist, high sales activity late last year and earlier this year borrowed from sales this summer and will continue do so over the coming months. As he said, "The hangover from accelerated home purchases is likely to persist over the rest of the year. Although economic and job growth are expected to be tepid, they will continue to support housing".

On the other hand, Georges Pahud, president of CREA, stated, "Rising interest rates and a projected slowdown in job growth mean that the Canadian housing market is expected to continue to cool. This is overlooked in recent commentary that suggests further changes to mortgage regulations may be needed. A further tightening of regulations could negatively impact Canada’s softening housing market and consumer confidence"

Source: Propertywire.com