May sales activity continues to ease with the largest declines occurring in the detached sector. Additional gains in new listings continue to increase inventory levels.
City-wide sales activity in May totaled 1,726 units and is 19 per cent below last years' levels. This is 24 per cent below longer term averages. Sales activity in the detached sector declined to levels not seen in over a decade.
"The impact of rising lending rates and stricter qualification levels is causing demand to ease across all product types," said CREB® chief economist Ann-Marie Lurie.
"Economic conditions have improved compared to several years ago, but the pace of economic recovery has not been enough to outweigh the changes in lending conditions."
Market supply has not adjusted to sales activity and is pushing months of supply to 4.9 months. Elevated supply relative to demand prevented any further price recovery in the market and city-wide residential benchmark prices totaled $436,900 in May. This is similar to last month and 0.6 per cent below levels recorded last year.
Detached sales and inventories have risen across all price ranges, but the amount of excess supply has been most notable for homes price above $500,000. Months of supply for the higher price ranges remain high compared to the past several years. However, they still remain below record levels that occurred post financial crisis (2008 – 2009).
"The changes in the lending market are preventing some people from moving up in the market. Uncertainty has also caused others to wait on making changes to their housing situation," said CREB® president Tom Westcott.
"However, there are pockets of the market that have not seen the same supply increase. It makes it so important to understand the dynamics of your community."
Bank of Canada clears way for July rate hike, warns of need to act to temper inflation
The Bank of Canada kept its key interest rate unchanged at its policy announcement earlier today, opting instead to look forward at July for a potential increase. Citing the impacts of uncertainty on the trade front, a housing market slowdown and “stress” in emerging markets, Canada’s central bank decided to leave its policy rate at 1.25 per cent. The Bank did, however, warn that it will need to act soon in order to temper inflation from rising past its target of 2 per cent. The interest rate has been increased three times in the past year, as the central bank goes about its tightening of monetary policy after a recession. Many analysts are expecting the Bank to raise its interest rate by 25 basis points to 1.5 per cent when it releases its next decision on July 11. (Article courtesy of the Globe and Mail)
Fixed or Variable? Trying to decide between a fixed rate or variable rate mortgage? Learn more about the differences in this blog by Maria Solverson, Mortgage Advisor at Jencor Mortgage.
Mortgage Plus Improvements Are you thinking of buying a home that needs some work? Did you know you can add the cost of the improvements to your mortgage? Learn more about this mortgage product here, in an article provided by Maria Solverson of Jencor Mortgage.
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There's a WHAT in my backyard?
A Lincoln's Sparrow! He's a medium sized sparrow with fine, crisp streaks and a buffy wash across the chest. Fun fact: female sparrows prefer males that sing on cold mornings, as opposed to warm mornings. Singing in the cold requires more energy and could mean they make better mates.
The pic is from Inglewood Bird Sanctuary, where we capture birds in mist nets, put a band on their leg that has a unique ID number, then take down their stats (weight, sex, age), before releasing. This helps researchers better understand population levels, habitat requirements, and survivability of a species. The oldest Lincoln's Sparrow on record is 7 years, 11 months, and was recaptured and released during banding operations in Colorado.
Data supplied by CREB®’s MLS ® System. CREB® is the owner of the copyright in its MLS® System. The Listing data is deemed reliable but is not guaranteed accurate by CREB®.
The trademarks MLS®, Multiple Listing Service® and the associated logos are owned by The Canadian Real Estate Association (CREA) and identify the quality of services provided by real estate professionals who are members of CREA. Used under license.
The trademarks REALTOR®, REALTORS®, and the REALTOR® logo are controlled by The Canadian Real Estate Association (CREA) and identify real estate professionals who are members of CREA. Used under license.