There were few signs that Canada’s home resale market was letting up in this morning’s statistics from the Canadian Real Estate Association (CREA). The numbers showed that home resales rose (albeit modestly) for the sixth consecutive month nation-wide in July to the highest level since March 2010, and that prices were still up comfortably from year-ago levels. While the fact that July sales levels moved further above the longterm average indicates that the market is getting hotter overall, this latest increase stemmed more from the temperature rising in previously cooler local markets than an overheating in markets that saw strong gains earlier this year such as Toronto, Calgary and Vancouver. In fact, activity fell in these three markets in July. Where the upward pressure emerged in July relative to June was in areas such as Montreal, Ottawa, Victoria and Halifax in July, which were soft markets until very recently.
The supply side of the market continued to adjust upwardly, thereby maintaining some balance with demand overall. The Calgary and Toronto markets continue to be among the few where supply is tight relative to demand; however, Toronto saw some reprieve in July with new listings rising faster than resales. The demand-supply balance also eased in Vancouver.
Home prices (MLS HPI) climbed at a year-over-year rate of 5.3% overall in Canada in July, still faster than growth in household disposable income (3.2%); however, the increase was still narrowly based in Calgary, Toronto and, to a lesser extent, Vancouver, where gains were substantial.
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