The sharp decline in home sales in Canada’s two hottest housing markets is not a major concern according to RBC Economics.
Senior economist Robert Hogue has commented on this week’s data from Toronto Real Estate Board and the Real Estate Board of Greater Vancouver, showing continued weakness in demand for homes.
“We aren’t overly concerned by what is becoming a more extensive market correction in two of Canada’s largest markets. At this stage, we still believe that neither is in a death spiral,” says Hogue.
He adds that demand-supply conditions as shown by sales-to-new listings ratio remain balanced.
Acknowledging the 5.4% year-over-year decline in Toronto prices, Hogue says that considering how high prices had climbed in the market, the decline should be seen as a positive development.
The economist noted the impact of the mortgage stress test and regional cooling measures on the latest sales figures.
Bumpy road ahead
“The road ahead is likely to be bumpy for both the Toronto and Vancouver market. Still, we expect that as long as the economy continues to grow they will manage to stay on track,” he concludes.