First-half housing sales slump

Listings way up; values moderately up as Canada’s housing market cools

Canada’s housing market cooled considerably in the first half of this year, with sales recorded by the Canadian Real Estate Association slumping by 13.1 per cent from the same period last year. The real estate group said that new listings of homes for sale on the Multiple Listing Service jumped 9.1 per cent to 518,270 units in the first six months - a record high - while sale prices rose a tepid 3.6 per cent following the double digit increases of the recent past.

Unit sales were down in all provinces except Newfoundland, with British Columbia, Alberta and Prince Edward Island experiencing a fall-off in sales topping 20 per cent.

The numbers are indicative of a housing market that is trending downward after several strong years, particularly last year, said association president Calvin Lindberg.

“In essence, Canada’s housing market has pulled back from the record-setting pace set in 2007, but in most provinces it continues at or near sales levels set in the years before that,” said Lindberg.

“The increase in housing prices is also pulling back from the record-setting pace of last year, but we have yet to see any of the price contractions that have impacted the housing market in the United States,” he added.

Lindberg noted that 251,550 units were sold through the multiple listing service in the January-June period, the fifth consecutive year sales have topped a quarter million.

Most of the decline this year occurred in February, after which activity has held steady, said the association.

Chief economist Gregory Klump added that the market appears to be cooling evenly between rural, urban and suburban markets. “There is no statistical evidence to date that shows increases in energy prices are prompting Canadians to re-locate,” he said.

The association’s latest report confirms previous indicators, including from CREA, that point to a slowing but not collapsing housing market in Canada. In a survey of Canada’s 25 largest markets earlier this month, CREA reported that prices had retreated by 0.4 per cent in June from the previous year.