The Canadian Real Estate Association (CREA) released its monthly numbers for all of Canada and – true to its forecast released last month – Canadian home sales dropped in October 2013.
MLS home sales fell 3.2 per cent month-over month; returning activity back to where it stood in the beginning of summer, prior to a surge of homebuyers looking to cash in before impending rate hikes.
“October’s lower activity provides early evidence confirming that sales in the later summer and early fall were boosted by homebuyers with pre-approved mortgages at lower than current interest rates jumping into the market before their preapprovals expired,” said Gregory Klump, CREA’s Chief Economist. “Now that interest rates appear to be going nowhere fast, sales activity in the near term may be held in check by homebuyers who are in less of a hurry to purchase.
CREA sees this the drop-off in sales as a sign that mortgage regulations are having the desired effect, though the association is aware that Finance Minister Jim Flaherty will likely keep a close eye on the market.
“While the Finance Minister will no doubt continue to keep a close eye on Canadian housing markets for signs of overheating as interest rates remain low, October sales results may provide him with reassurance that tightened mortgage regulations and lending guidelines are working as intended.”
However, the seasonally adjusted numbers for October came in 0.9 per cent above the average October sales over the past decade.Sales also shot up, year-over-year, in over half of the local markets; led by Greater Vancouver, Calgary, Edmonton and the GTA.
According to CREA president, Laura Leyser, the majority of markets are chugging along at a healthy pace.
“A majority of local markets across the country are still seeing a healthy balance between buyers and sellers coupled with modest price growth,” she said. “Even so, there are some markets in the Prairies and in parts of southwestern Ontario where competition among buyers has increased, while parts of Quebec and some areas in the Maritimes have been seeing increasing competition among sellers.