National market balanced in March: CREA

The number of seasonally adjusted national home sales during March edged up a 10th of a percentage point above levels for the previous month.

Seasonally adjusted national sales in the first quarter of 2011 rose 4.5% compared to the fourth quarter of 2010, bringing sales to their highest quarterly level in a year.

But again the strength of the Canadian housing market was a product of increased activity in Vancouver and Toronto, two of the country’s least affordable and highest appreciating cities.

Strong sales activity for high-end homes in both cities throughout the first quarter of 2011 skewed the national average price. Vancouver finished the quarter with 8.9% year-over year gain in March, CREA’s Chief Economist Gregory Klump said.

“A record number of multi-million dollar property sales in Richmond and Vancouver West are pushing up average prices for Greater Vancouver, British Columbia and nationally. If Vancouver is excluded from the equation, the national average price increase is cut by more than half to 4.3%,” he said in a statement released on April 15.

The feds’ mortgage rule changes caused a rush of sales in March as first-time and move-up buyers raced to beat the March 18 deadline. But the majority of that sales activity happened in the Greater Vancouver condo market, Klump said.

“This confirms that the expected impact on sales activity of recent changes to mortgage regulations will likely be minor over the near term. Interest rates are now widely expected to remain on hold until at least mid-July, which is supportive for resale housing demand, market balance and prices,” Klump added.

According to CREA, national sales should remain steady while the number of listings on the market should continue to tighten.

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