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RBC Economic Research - Canadian housing finally found its footing in June

Tina Myrvang

Client Care Lead
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Nov 15, 2010
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We have just released our latest monthly housing market update entitled "Canadian housing finally found its footing in June".


Highlights of the report:



•Following a longer-than-anticipated adjustment to tighter mortgage rules, many Canadian housing markets showed further signs of stabilization in June. Unit sales rose 4.1% from the previous month, the first substantial increase so far this year. Sales were up across the Prairies and Central Canada, while British Columbia continued to adjust to additional measures at the provincial level.

•A slow spring for resales seemed to leave sellers unsure about market conditions, with new listings falling 1.8% month-over-month. It was the slowest June for new listings since 2009.

•Opposite moves in resales and new listings led to slight firming in demand-supply conditions. At a national level the sales-to-new listings ratio remains firmly in balanced territory, though conditions are closer to favouring sellers in Central Canada. Markets in Western Canada are generally more balanced, or slightly in favour of buyers.

•The national benchmark price was up just 0.9% from a year earlier, close to May’s pace. After the sharp deceleration over the last year, it looks like year-over-year price growth is starting to stabilize at a slow rate. Prices remained below year-ago levels in several markets in Alberta, Saskatchewan and Ontario.

•Signs of stabilization in many local housing markets should please policymakers who likely got a bit more cooling than they bargained for out of new mortgage rules that took effect on January 1. Rising interest rates, including another hike from the Bank of Canada last week, and stretched affordability will likely cap any recovery over the second half of the year. But we think this more subdued sales pace and flatter price growth is a positive development for the longer term health of the housing market.



Link to the full report

To view, print and download the new report, click on the following link:

http://www.rbc.com/economics/economic-reports/pdf/canadian-housing/housespecial-july18.pdf
 
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