Real estate comes back to earth

Anecdotes about hard-to-sell houses and cooling real estate markets abound in Toronto these days, but the discomforting rumours have yet to play out in the data. The housing market, according to the Canadian Real Estate Association, has lost considerable momentum, but is probably just coming back to earth.

In the first half of 2008, existing home sales were 13.1 per cent lower than a year earlier. The number of homes on the market rose 9.6 per cent. But CREA points out that the market was merely coming off record-high activity last year, and settling back to levels of still-vibrant activity seen in the preceding years.

The ratio of new listings to sales shows that Canada’s housing market is less of a sellers’ market than since 2000, but is still not heavily in favour of buyers, say economists at National Bank Financial. That’s the case in seven out of 10 provinces, they say.

And prices are not falling; they’re rising, although not as sharply as in the past. The average price of a house in Canada hit a record high in the first half of 2008, at $313,610 - up 3.6 per cent from a year earlier. Only Alberta saw price declines, down 0.1 per cent.