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The Canadian Real Estate Association will release data on Monday about the number of homes that changed hands in May, and it's likely to provide more evidence that policy-makers have pulled off a soft landing in the market – for now.

It's a fine line. The steep sales slump that began last summer, after Finance Minister Jim Flaherty tightened the mortgage insurance rules, appears to be ending. But if the market picks up too quickly, Mr. Flaherty could be forced to pour cold water on it again.

The central bank warned last week that the housing market and high consumer debt loads are still the biggest threats facing the economy. It cited some positive developments since last year: Sales activity has fallen and levelled off, housing starts have moderated and house prices are no longer rising in most cities.

But it added that there are still signs of overbuilding, particularly in downtown Toronto, where a large pool of unsold condo units has accumulated. If the developers who are constructing these units can't find buyers, it might trigger a drop in prices that could spread to other parts of the housing market and infect the economy.

While the central bank continues to warn of the dangers, economists are increasingly willing to declare victory over the threat of a housing crash in the near-term. "Canada's housing market is cooling, but gradually and in line with policy-maker objectives," Moody's senior economist Mark Hopkins said in a research note on Friday.

"Fears that Canadian housing is a bubble about to pop are premature," he wrote, adding that some price declines will be necessary to bring demand inline with supply. Monday's data are expected to show that prices are still rising, but not at the pace that they had been last year.

Bank of Montreal economist Benjamin Reitzes is looking for May's national sales to come in 2.7-per-cent lower than last year, which he noted would be "the smallest drop since October and a big improvement over the 10-per-cent year-over-year decline through the first four months of the year."

Based on data that have already been released by local real estate boards, May's sales were 3.4-per-cent lower than last year in Toronto and 7 per cent higher than last year in Calgary. Vancouver saw sales rise 1 per cent, the city's first positive showing in a long time.