The Canadian real estate market held strong in the first quarter of 2011. Rising up 4.5 per cent from 2010, the housing market has reached its highest quarterly level in a year.
The Canadian Real Estate Association (CREA) reports that most of this market increase is due to demand for Vancouver and Toronto real estate. Mortgage regulations changed early in the year, therefore, many buyers in Canada’s expensive housing markets bought earlier than expected to avoid the March deadline of mortgage changes. This resulted in a significant rise in sales of newly listed homes for January and February of this year.
The Canadian national resale housing market has tightened up as well. Sales activity and the addition of fewer new listings have created a steadier real estate market. Real estate supply and demand is measured by the national sales-to-new ratio. In March the ratio was at 56.5 per cent portraying a balanced market.
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“The majority of local housing markets across Canada are well balanced, but not all of them are,” said Gary Morse, CREA’s President. “Within a province or local market, the balance between resale housing supply and demand can vary widely and evolve quickly, so buyers and sellers should speak with a local REALTOR® to understand housing market trends where they live.”
Although the housing market looks strong for the first quarter, it was skewed higher by Vancouver sales activity.
“Looking ahead, evidence suggests that the potential rush of sales activity in March before recent changes to mortgage regulations took effect was a story that was largely focused in condo sales activity in Greater Vancouver. This confirms that the expected impact on sales activity of recent changes to mortgage regulations will likely be minor over the near term. Interest rates are now widely expected to remain on hold until at least mid-July, which is supportive for resale housing demand, market balance and prices,” said Gregory Klump, CREA’s Chief Economist.