Canada’s housing market already topped what economists had expected for the spring and summer, and could do it again this fall.
Local real estate boards are beginning to release September’s data, and the numbers so far are strong. Toronto, Calgary and Vancouver are all reporting solid year-over-year increases.
“People are talking about whether the market’s had a hard landing or a soft landing, but so far there’s no landing whatsoever,” said Canadian Imperial Bank of Commerce economist Benjamin Tal. “My sense is that activity is too strong for the liking of regulators, and maybe the government. The market is stronger than it should be at this stage of the cycle.”
He suspects that some of the strength still stems from prospective homebuyers deciding to jump into the market now to lock in low mortgage rates before they rise further. “Part of what we’re seeing now is people stealing activity from the future, out of fear of higher interest rates.”
The Toronto Real Estate Board said Thursday that the 7,411 homes that sold in the GTA over the Multiple Listing Service during September was 30 per cent higher than in September of 2012.
“We expect to see sales up for the remainder of 2013, as the pent-up demand that resulted from stricter mortgage lending guidelines continues to be satisfied,” said Toronto Real Estate Board president Dianne Usher.
The market is still recovering from a slump. The number of homes that have sold in the Toronto area so far this year remains about 1 per cent lower than during the same period in 2012.
The MLS Home Price Index for the city was up 4 per cent year-over year, and the Toronto Real Estate Board said the annual rate of growth in prices has been accelerating since the spring. That’s being driven by detached homes. Detached homes in the downtown 416 area code saw prices rise 10.2 per cent last month from a year earlier, while condo prices were down by 3.7 per cent.
Calgary’s local real estate board said September sales came in 19 per cent higher than a year earlier, and 14 per cent above the long-term average for that month. The board added the momentum of July and August seems to have waned a bit as the short-term impact of the floods has passed.
“Nonetheless, sales growth remains strong, in part because net migration has been stronger than anticipated and rental product is in short supply,” Ann-Marie Lurie, chief economist for the Calgary Real Estate Board, stated in a press release.
“While prices show strong year-over-year gains, if the level of new listings continues to improve relative to sales activity, prices should level off for the remainder of the year,” she added. Prices were up more than 7 per cent on a year-over-year basis.
Vancouver’s real estate board reported a 63.8 per cent increase in September sales, compared to a year earlier.
But it’s important to note that sales at this time last year were sinking across the country, in the wake of Finance Minister Jim Flaherty’s decision to tighten mortgage insurance rules in July 2012.
Despite Vancouver’s rise, its September showing remains 1 per cent below the 10-year average sales level for September.
“While sales are up considerably from last year, it’s important to note that September 2012 sales were among the lowest we’ve seen in nearly three decades,” Sandra Wyant, president of the Real Estate Board of Greater Vancouver, said in a statement.
The MLS Home Price Index benchmark price for all types of residential properties in Greater Vancouver stood at $601,900 in September, down 0.7 per cent from a year earlier but up 2.3 per cent from the start of the year.