Has Canadian Real Estate Market Bottomed?

April 15, 2009

Prices in the Canadian real estate market seem to have dipped low enough to rekindle some buyer interest, according to the latest statistics from the Canadian Real Estate Association. A seasonally adjusted total of 31,135 existing homes changed hands in March. That’s up 7 per cent from February and 18 per cent from January.
“Housing markets are starting to show signs of buyer interest because of lower prices and interest rates,” said Regina real estate agent Dale Ripplinger, and CREA president, in a press release.
Actual transactions were down 13.7 per cent year-over-year in March, while resale prices were down 7.7 per cent over the same span. Both represent the smallest declines in their respective categories over the last six months.
“A number of major housing markets are stabilizing, as buyers respond to improving affordability,” said CREA chief economist Gregory Klump. “Looking back to economic recessions in the early 1980s and 1990s, national resale housing activity bottomed out before the job market or economy did.”
The lion’s share of the increase came from two provinces, British Columbia and Ontario, which saw their monthly activity increase by 13.6 and 10.5  per cent respectively between February and March. Quebec saw an increase of 5.5 percent in its activity, while Alberta was flat on the month.
Seasonally adjusted new listings on Multiple Listing Service totaled 208,755, in the first quarter, or 6.4% lower than the final quarter of 2008. That represents a third consecutive quarterly decline. “We expect April sales activity will feel some effects from the federal government incentives announced in the last budget, including the increase in the maximum withdrawal allowed under the Home Buyers’ Plan, and the First Time Buyer Tax Credit,” said Ripplinger.