Housing market momentum to carry strong sales volume into 2010: Scotiabank
By Mario Toneguzzi
Calgary Herald
March 23, 2010 9:02 AM
CALGARY - The momentum in the Canadian housing market has carried through to early 2010, with the volume of sales transactions in January and February only slightly below the near-record levels of late 2009, says a report released today by Scotiabank.
And the average MLS sale price in Canada will reach a record level this year.
"Strengthening labour markets are underpinning confidence, while generationally low mortgage rates
— and expectations that borrowing costs will soon be headed higher — are adding a sense of urgency," said the Global Real Estate Trends Report authored by economist Adrienne Warren.
"Milder-than-usual temperatures across much of the country may also have put a bit of spring into the
typically slow winter sales season. Average prices too are testing new highs, both for new and resale homes. A steady increase in the number of listings in recent months alongside a sharp increase in new construction is restoring a much better balance to the overall market compared with the latter half of 2009."
But the report said sellers’ conditions persist in most major centres.
The report said continued strong demand and pricing is expected through the spring, especially given an expected rush of buyers hoping to pre-empt tighter qualifying criteria for insured mortgages effective mid-April as well as the July 1 introduction of the HST (Harmonized Sales Tax) in Ontario and British Columbia.
"However, this should give way to more subdued activity in the second half of the year, as higher interest rates and higher home prices erode affordability. The incentive among builders to add substantial new housing stock should likewise fade as supply increases and prices cool."
The report expects the volume of MLS sales to hit about 510,000 this year, up 10 per cent from
2009 but still a touch shy of the 2007 record at the national level. Average prices are forecast
to increase about eight per cent to a record $345,000 in Canada.
Housing starts are estimated at 190,000, up from 149,000 last year.
Photo by: _Caitlyn
