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Cooling Canadian market vastly different from the US

There’s been a shift in Canada’s real estate market, but the good news is we’re still a long way from that of our American neighbours.  MLS® statistics released recently by The Canadian Real Estate Association (CREA) point to a moderating market in many of Canada’s major urban centres.  Over the past six months, easing sales activity and a surge in new listings have caused the resale market to become considerably more balanced in many major markets. Vancouver, Regina and Saskatoon were the most balanced major markets in June.

However, while the Canadian real estate market is cooling, it’s still quite different from the U.S. market with its record low number of foreclosures or defaults, says CREA.   Home prices in the U.S. dropped by 14.1% in the first quarter of the year, according to the Case Shiller national home price index.  That’s a scenario the Federal Government doesn’t intend to let happen here.

In fact, the Federal Government is taking steps to ensure that Canada does not run on a similar track to our neighbours to the south.  Finance Canada has moved to clamp down on those buyers who may be heavily leveraged in their bid to become home owners, says CREA, adding that this is not expected to have any major impact on the overall market before changes go into effect in October.

Probably the best indicator that the Canadian market is vastly different from the U.S. is increasing resale home values.  Here in Canada, while the pace of sales is slowing slightly from last year’s record-breaking pace, prices are still on the rise.  The major market residential MLS® average price set new records for the first half of 2008, as well as for the second quarter of the year.  In the first half of 2008, the MLS® residential average price rose 3.2% year-over-year to $340,390. On a quarterly basis, the average price in Canada’s major markets was $343,235 in the second quarter, up 1.4% from the second quarter of 2007.

New monthly records for MLS® residential average price were set in a number of major markets in June, including Saskatoon, Kitchener-Waterloo, Thunder Bay, Ottawa, Saint John (NB), and St. John’s (NF).
The resale housing market is more balanced than it was last year in all major urban centres, concludes CREA.  The frenzied pace for sales activity last year has faded, with buyers now better able to shop around before making an offer. Price increases are expected to be modest in the second half of 2008, as sales continue easing and new listings remain high.

Want to know more about market conditions in your local neighbourhood?  Contact the Duplessis Group for the latest insights into real estate values and sales activity in your own community.  

Published Tuesday, October 28, 2008 4:34 PM by DUPLESSIS Real Estate Group

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