CREA released September’s real estate figures today which prompted an upbeat BMO to write, “Any worry about a hard landing in Canadian housing has quickly become a faint memory.”
RBC concurs: “The statistics released today continue to paint a fairly sanguine picture of Canada’s housing market activity. Fears of an imminent collapse have largely receded by now…”
Sales in Canada rose 18.2% y/y but that’s being compared against a September 2012 market which was limping after the latest round of mortgage rule changes.
A better perspective is obtained when viewing the historical 10 year average which shows sales were right in line for the month.
Calgary was among the best performers, with sales up 20.5%, the MLS HPI up 7.28%, and average price up 8.2% y/y.
TD Bank reminds us that real estate is local and that no two markets are the same:
- Momentum may prove more lasting in markets with fewer excesses, like Calgary and Edmonton where homes appear fairly valued and sales are being supported by decent labour markets and population growth.
- Toronto and Vancouver, may prove to be more vulnerable to the future rise in interest rates, given the overvaluation in home values.
- Ottawa and major markets in Quebec are likely correcting following a decade of overbuilding with prices beginning to weaken due to a growing overhang of properties for sale on the market.