The Canadian Real Estate Association (CREA) released data for July 2018, which showed that despite a low inventory of homes, sales were up in a majority of local markets. This is a sign that there is ongoing demand for homes in Canada.
The CREA reported that the average price of a home was up by 7.3%, year-over-year. This represented the largest year-over-year increase since May 2017. However, the CREA also noted that the numbers may have been impacted by the fact that there were fewer lower priced homes available on the market. They also warned that some local markets were seeing more pronounced increases in prices.
The low inventory of homes is a major factor impacting the housing market. The CREA reported that new listings were down in most of the local markets and that overall supply was at its lowest level since 2008. The result of this is that buyers must compete in order to secure a home purchase.
The CREA also stated that rising mortgage rates, due to higher Bank of Canada interest rates, would likely have a dampening effect on overall home sales. This is especially true for potential buyers who are already struggling to come up with a down payment. As such, the CREA noted that first-time homebuyers would be particularly sensitive to changes in interest rates.
Overall, the recent CREA data paints a picture of a strong housing market in Canada. Sales are up, prices are rising, and there is a low inventory of homes. Despite these favorable conditions, buyers should still proceed with caution. Rising mortgage rates could have an impact on their ability to afford a home, while competition for existing homes can be fierce.
The Canadian Real Estate Association (CREA) recently released data for July 2018 which shows a strengthening of the housing market and rising prices across Canada. The average home price increased by 7.3% year-over-year, the largest increase since May 2017, which is a good indicator of ongoing demand. Low inventory of homes is a major factor putting pressure on the market, as new listings decreased in most local markets and overall supply was at its lowest level since 2008. This has created a situation where buyers must compete to secure an available home.
Rising mortgage rates, due to higher Bank of Canada interest rates, could have a dampening effect on overall home sales, especially for first-time homebuyers who may struggle to come up with a down payment. It is important for buyers to be aware of these factors when considering a home purchase, as they can make it difficult to afford a home.
Nevertheless, the overall trend in housing in Canada remains strong. Even with the challenges posed by rising costs and competition, there is still reliable demand and an increase in prices. This indicates that the housing market is healthy and provides a potential opportunity for buyers looking for a home.
This article was contributed on Aug 15, 2023
