In its report on national home sales numbers as of May, the Canadian Real Estate Association pointed at a 1.6% month-over-month increase in Toronto residential transactions – a development that analysts said was the “first sign of stability” in the long overheated market
“For policy makers, that’s exactly what they are looking for, that the bottom isn’t falling out for housing,” BMO Capital Markets Canadian rates and macro strategist Benjamin Reitzes told Bloomberg.
Defying earlier predictions by economists which pegged sales declines of an average of 1.1% month-over-month, transactions shrunk by merely 0.1% in May, which according to CREA is near the lowest levels in 5 years.
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CREA noted that this moderation might be indicative of would-be home buyers’ gradual adjustment towards the stricter regulatory regime and recent interest rate hikes. Data showed that sales numbers increased in almost half of all markets nationwide.
“The stress-test that came into effect this year for home buyers with more than a 20% down payment is continuing to suppress sales activity,” CREA president Barb Sukkau wrote in the report.
Despite these makings of a positive market trend, however, the Association is still projecting an 11% year-over-year decline in 2018 sales, shaving the number of nationwide transactions down to 459,500.
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Ephraim is currently a journalist at Mortgage Broker News, Real Estate Professional and Canadian Real Estate Wealth.
Ephraim is a highly accomplished news reporter whose work has been published across North America and the Asia Pacific region. Before joining Key Media, Ephraim spent eight years working as a journalist with Reuters TV. His areas of expertise include real estate, mortgage, and finance.
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