October Market “Sustainable” but Show Signs of Cooling

Recent statistics released by the Canadian Real Estate Association show that the Canadian real estate market has changed very little from September. While this shows further signs of cooling, most likely due to the new OSFI rules and the federal mortgage rules that went into effect this last summer, it has some experts pointing to the fact that this shows that Canada’s market is actually more sustainable than it was previously.





According to MLS, home sales in October dropped only by 0.1 per cent when compared with the month before, and that signs are showing less activity in the last half of this year, than the first. Although improved with small increases seen in home sales during the month of October, the areas of Greater Vancouver and the Greater Toronto Area are still showing significant drops in their levels when compared with the first two quarters of the year. Calgary saw an increase in sales, even when compared with the numbers from a year ago, showing increases in two-thirds of their market.

“Sales data in October held steady at the national level, but we are seeing some diverging trends among local housing markets,” says Wayne Moen, CREA president. “Markets in Alberta and Saskatchewan are gaining strength, while some of Canada’s traditionally most active markets have lost steam. As always, all real estate is local, so buyers and sellers should talk to their REALTOR to understand how the housing market is shaping up where they live or might like to live.”

The trend of increasing home prices amidst slowing sales is still continuing, as prices still continued to climb during the month of October, showing that perhaps we have yet to experience the drop of 10 – 15 per cent that many economists are calling for. The good news is that the national average on a home sold in October was only $361,516; an increase of only $80, or 0.02 per cent, from October of 2011.

The number of listings was also down in October, which could be good news seeing as how September saw a fairly significant increase in listings. The drop of 3.8 per cent that was seen in October was mostly due to drops seen again in Greater Toronto and Greater Vancouver.

While not all the news is positive, it rarely is; and Canadians should take heart at the numbers that are starting to be seen, and trends that are emerging. Those over at the CREA certainly are.

CREA chief economist, Gregory Klump says that, “the Canadian housing market overall has returned to a more sustainable pace.”

Do you agree with him?