It’s no secret that 2010 was an interesting year in the Global real estate market with economic downturns and buying booms, but a December study illustrates just how unstable the Global market was last year.
A recent study conducted by Scotiabank Group shows a modest recovery for residential housing markets in 2010 through a series of ups and downs.
The study found Canada as one of the best performing nations, but with a very unsteady climb to stability. The winter and spring months were unusually active due to fears of rising interest rates and the impending Harmonized Sales Tax in Ontario and British Columbia in the summer, along with changes in lending criteria. More than 52,000 homes were sold in April 2010. That’s a 20 per cent increase from 2009.
The sales burst died down by July, leading to a stale summer as Canadians tightened their budgets as the HST took effect in two of the largest provinces. Canadians weren’t sure how their cost of living would be affected by tax and economic changes and reined in their home buying habits. After a slow summer, the fall brought with it a more stable market, closer to the norm, with prices remaining the same throughout the year.
With 2011 upon us, the outlook for the new year is a little more stable. Interest rates aren’t expected to rise until later in the year while the Bank of Canada waits out the uncertain economy. This means prices will remain low, giving first-time buyers a great chance to enter into home ownership. In addition, the Canadian Real Estate Association (CREA) has deemed the current market as a sellers market, so current homeowners are feeling more confident upgrading.
“An increase in new listings is likely to return many sellers markets to balanced territory over the coming months,” said Gregory Klump, Chief Economist for CREA, in November. “With sales activity having returned to better health and a firm floor under prices, sellers who previously shied away from putting their home on the market are expected to list their home in response to improved housing demand in recent months.”
He adds that rising interest rates and weaker expected job growth will likely contribute to softer housing market activity and average price growth this year.