Canada housing market shows a downtrend

Canada, 17th August: Housing market in Canada is showing a declining trend following introduction of recently introduced harmonized sales tax (HST) in Ontario and British Columbia.

This has been revealed by Canada Real Estate Association (CREA).

According to the association based in Ottawa and representing 100 boards across the nation, sales of houses in Canada went down in the month of July by 30 percent as compared to the same month a year ago.

Also, prices of houses in Canada in July went down 3.5 percent as compared to June 2010. The biggest decline in the houses in Canada was registered in Vancouver with a 45 percent fall.

The total number of houses sold in the month of July was 31,536 which was less than the figure of 33,836 in June 2010. 
Ontario housing market went down by 8.0 percent while that of B.C.(British Columbia) was down by 14.1 percent.

And a probability could be that all those who wanted to buy a home in Canada this year had done this in the earlier months this year, stated Doug Porter, deputy chief economist of BMO Capital Markets. Echoing his views, president of CREA Georges Pahud said that higher number of purchases of homes in Canada earlier this year have led to plunge in the sales of houses in Canada now.

Nonetheless, the introduction of HST together with stricter Canada mortgage insurance regulations and a backup in the borrowing costs have inevitably given a harsh blow to the Canada housing market.

Many went ahead with their plans of buying houses in Ontario and B.C. before the introduction of the HST in July making the market witness a slowdown in the following month.

Although, the current trend of slowdown in the Canada housing market is likely to linger on for some time before jumping to stability shortly, Pahud maintained.

Average sales price of houses sold in Canada in the month of July was $330,351 after registering a high at $342,662 in June this year.

In July, seasonally adjusted new residential listings went down by7.2 percent as compared to the previous month. The prices are likely to stay stable and with improvement in employment, the outlook does not appear to be dire, Mr. Porter added.