Canada’s real estate market has been witnessing a steady revival and recovery over the last few months, particularly with demand rising and an improved state of the economy. Major cities like Toronto are already witnessing an increase in construction of condos and other housing types while people have already absorbed the impact of higher property prices and other regulatory measures en route towards starting to buy real estate once again.
In a heartening sign, home sales figures have gone up nationally for the month of July this year which indicates steady growth and revival for the Canadian realty market, something that has enthused property developers and realtors alike.
Home sales grow considerably in July 2019
Home sales figures witnessed extensive gains in July 2019 with markets posting a steady recovery from the overall impact of the mortgage stress test that was implemented in 2018. However, there are still some future hurdles that may be encountered as per market experts. Overall the scenario looks pretty positive for Canada real estate.
Here are some of the key points worth noting in this regard:
- CREA (Canadian Real Estate Association) has officially stated that home sales figures witnessed 12.6% of growth this July as compared to July 2018.
- Sales figures have gone up by approximately 3.5% as compared to June 2019 on a seasonally adjusted basis.
- Sales figures are recovering in several areas where they had previously come down prior to the mortgage stress test being implemented at the start of 2018.
- Sales activity in these areas has started improving although they are still lower than the threshold seen before the introduction of the stress test as per reports.
- Sales figures increased in some of the key markets in Canada including the Lower Mainland in B.C. along with Edmonton, Calgary, Hamilton-Burlington, Greater Toronto Area (GTA), Montreal and Ottawa.
- Sales volumes were also lower in Saskatoon, Regina, and Windsor-Essex among other markets.
Major market trends worth noting
The comprehensive sales increase for homes in the country is at the best possible levels ever since the mortgage stress test was executed in 2018 as per market experts. The Canadian real estate market is showing several signs of firming up and recovering after a tough duration of 18 months. The Federal government has already upgraded the rules for qualifying for mortgages at the beginning of 2018 in order to make more aspiring home borrowers to establish their ability to manage repayments smoothly in case rates of interest increased in the future.
The sales to new listings ratio nationally touched 59.8% in July 2019 as compared to 57.6% posted in June 2019. This indicates a housing market that is more balanced as per the latest reports. The sales growth was achieved with the numbers coming down by 0.4% last month for newly listed housing units. This led to pressures being exerted on pricing. Sales figures once again got back a little momentum and the market witnessed a tightening effect across multiple regions. As a result, it is quite natural that prices are also recovering in several markets.
What experts feel
- The average home price nationally for a unit sold last month was just lower than $499,000 which indicates a rise of 3.9% as compared to July 2018 and 2.6% of growth (seasonally adjusted) in comparison to June 2019.
- Price increases were witnessed in double digits in several residential zones in Ontario including Kitchener-Waterloo and Ottawa while prices came down in cities across Western Canada.
- Experts feel that borrowing costs may come down in the near future which may be a major boost for the housing market in Canada although the impact of rates may not be felt as much in case of any economic upheaval.
- In case economic uncertainty globally transforms into anything problematic for the domestic Canadian economy, rates of interest will cease to be a vital force for Canadian housing market growth.
- Experts feel that the market currently looks solid and balanced enough and will be backed by growth in population in the near future along with increased employment opportunities and lower rates of mortgages.
- Most housing markets in the nation are looking more balanced and the immediate risks of a huge slide in home prices have been combated with higher sales and rising demand.
- This is the 5th consecutive month where home sales volumes increased throughout Canada as per CREA reports.
All in all, the situation looks nice for the housing market in Canada although it will still take some time for the momentum to fully set in.