The number of properties listed in some of Canada's major markets was down this quarter. This shift can be interpreted as a shift towards a more balanced sales-to-new-listings ratio. To achieve what would be considered a "balanced market", we look for the number of sales to equate to the number of houses put on the market for sale. Calgary, Edmonton, Vancouver and Montreal have all shown slight drops since the previous quarter. The third quarter indicates that we are headed in the direction of a more balanced market.
"Informed buyers and informed sellers look at the facts. And the facts right now indicate the real estate resale market is stabilizing in many markets," says Calvin Lindberg, the President of The Canadian Real Estate Association.
"There have also been a number of initiatives that will have an impact going forward, including the government's decision to invest $25 billion in insured mortgage pools, the recent drop in the Bank of Canada rate, and the new rules reducing the maximum amortization to 35 years instead of 40," the CREA President adds. The new mortgage rules took effect October 15th. "The third quarter MLS® statistics and these developments are more factors showing the Canadian market is not following U.S. housing trends."
Sales activity remains similar to that of last year, but prices, on average, have dropped slightly in the more expensive markets. This is due to an increase in the sale of houses of lesser value and lower sales activity in the higher priced markets.
"As the Canadian housing market and pricing environment cools, the number of days on market for sales is likely to rise. By and large, Canadian home sellers are under no financial duress to sell. Canadian homebuyers should not expect to see the kind of price correction that's underway in the U.S., where overly indebted homeowners are selling into a housing market where foreclosures and the number of newly constructed unoccupied homes are increasing."