Posthaste: Canada's housing market 'recovery' gets a reality check
Don’t count on that housing market recovery just yet.
Hopes for a turnaround after gains in December and January got a dose of reality last week with reports of falling home sales in several major Canadian markets, suggesting it’s too early to sound the ‘all clear.’
“Anyone expecting smooth sailing ahead for the housing market got a reality check in February,” said Robert Hogue, an economist with Royal Bank of Canada in a report Friday.
Declines in February partly reversed the gains of the previous two months — a reminder, Hogue says, that “very challenging affordability conditions” are still holding buyers back.
Sellers, however, did return. Hogue estimates that new listings rose between 3 and 14 per cent from the month before in Vancouver, the Fraser Valley, Edmonton, Hamilton and Montreal.
“We suspect sellers who took a pass in the fall may have taken an early jump on the upcoming spring market, warmed by news of busier activity in December and January,” he said.
The wider inventory though failed to entice buyers.
Sales in Toronto, Canada’s biggest market, fell 12 per cent from the month before, reversing half the gains seen in the previous two months.
“This up-and-down pattern could be a sign of things to come, as interest rate uncertainty and poor affordability keep buyers and sellers on their toes for the next while,” said Hogue.
Vancouver home sales are now “historically soft” at 23 per cent below the 10-year average.
“We don’t expect this softness to ease quickly. Affording the purchase of a home is extremely difficult in Vancouver and will continue to be a major constraint for buyers,” said Hogue.
Meanwhile, sellers flooded into this market, with new listings jumping 31 per cent after an even bigger increase in
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