The number of home sales processed through the MLS® Systems of Canadian real estate Boards and Associations and other co-operative listing systems rose 2.8 per cent on a month-over-month basis in August 2013. On a year-over-year basis the climb was 11 per cent.
The number of local markets where sales improved on a month-over-month basis ran roughly even with those where activity edged lower in August, with increases in major urban centres tipping the balance.
“All real estate is truly local, but sometimes sales trends can change similarly in a large number of markets at the same time due to factors that can affect all markets across Canada,” said CREA President Laura Leyser. “The recent hike in fixed mortgage rates is one example of an influence that affects all markets, but it’s just one of many things that shape housing market trends.”
Sales were up on a year-over-year basis in about two-thirds of local markets, led by double-digit gains in Vancouver Island, Victoria, Greater Vancouver, the Fraser Valley, Calgary, Edmonton and Greater Toronto.
“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 Gregory Klump, CREA’s Chief Economist. “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.”
“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 added. “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.”
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