August stats from the Canadian Real Estate Association (CREA) reveal sales in many major markets are up year over year, with brokers in the Yukon, British Columbia and Alberta having the most cause to celebrate.
Still, seven out of 12 markets surveyed saw a drop in units sold, with an 11.1 per cent change posted nationally.
According to CREA Chief Economist Gregory Klump, the increase is the result of a normalization in the market following new mortgage rules implemented in July 2012.
“Sales activity dropped sharply around this time last year in the wake of tightened mortgage rules and has improved since then, so a sizeable year-over-year increase this August was expected,” said Klump. “Buyers who put off purchase decisions or who were otherwise sidelined by tighter mortgage rules and lending guidelines implemented last year were anticipated to return to the housing market. That said, the upward trend and levels for activity in recent months has been steeper than expected, but that may not last.”
Year-over-year sales were lowest in the Northwest Territories, which saw a 55.6 per cent decrease from August 2012 to 2013. Conversely, the Yukon saw a drastic increase of 52.4 per cent reported over the same period, while British Columbia and Alberta also posted significant increases of 28.6 and 17.8 per cent respectively.
Klump posits that the national surge in properties exchanging hands is largely due to fence-sitters hopping into the market in the wake of increased interest rates.
“Recent increases to fixed mortgage rates caused sales to be pulled forward as buyers with pre-approved financing at lower rates jumped into the market sooner than they might have otherwise,” Klump said. “That pool of homebuyers has largely evaporated so demand may soften over the fourth quarter. The outsized year-over-year gains may persist, however, due to weak sales toward the end of last year.”