More housing supply helps balance market: CREA
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14/03/2010 9:00:00 AM
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National home sales decreased by 1.5 per cent from January to February, according to the latest CREA numbers, in large part due to increased supply. Vancouver saw the biggest decline, likely due to the Olympics, while Toronto experienced the biggest gain.
"Housing markets are becoming more balanced," said CREA chief economist Gregory Klump. "There are still a number of major markets where sales negotiations favour the seller due to a shortage of inventory, but supply has begun rising. Further expected supply increases will continue to take the steam out of housing markets as the year progresses."
Despite the slight decrease, year-over-year numbers remained strong with residential sales activity up 44 per cent from the same month last year and the average price - $335,665 - up 18.2 per cent from one year ago.
Sales and prices are expected to become "more subdued" throughout the year, the CREA said. However, it expects sales activity to elevate in Ontario and B.C. before the introduction of the harmonized sales tax in July.
"Even with the restraints put on the actual market, Ontario is a very unique landscape -- it's becoming a hotspot that drives prices no matter what," said Jeff Mayer, a Toronto-based Mortgage Intelligence agent. "If you look at the cost per square foot, it has risen dramatically and you only see that in hot, hot areas."