While media reports still centre on price wars and discouraged potential buyers, the national real estate story may have a new focus. The Canadian Real Estate Association (CREA) has expressed concern over several months that housing sales are dropping nationwide. Many wonder: Could the national resale housing market be slowing down?
Some are cautiously saying “yes.” Royal Bank of Canada Senior Economist Robert Hogue noted: “The long-awaited cooling of Canada’s housing market may be finally at hand; only time will tell. When you look at market conditions in Canada’s two hot markets, it is still very, very tight.”
Some signs: Interestingly, Vancouver’s market may now be partly responsible for the latest declining results. Vancouver’s hot real estate markets had been pushing up national results for some time. But the B.C. tax imposed in early summer on foreign buyers had an immediate impact: Sales fell 6.7 per cent in Vancouver in July. Meanwhile, Toronto’s market showed month-over-month declines for most of the summer.
Late reactions? Governments, meanwhile, have started to look for ways to control the housing market. For example, the Office of the Superintendent of Financial Institutions Canada (OSFI), Canada’s banking regulator, recently warned the country’s major financial institutions that it will be scrutinizing their loan books much more closely, and has instructed them to pay better attention to the finances of their mortgage customers.
One real estate watcher suggests that (with exceptions) the national housing market has already begun to slow-so no national interventions are needed. It remains to be seen.