After long boom, Canada's housing shows some cooling signs

Mon May 30, 2016 7:00am EDT
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By Julie Gordon and Andrea Hopkins

VANCOUVER/TORONTO May 30 (Reuters) - Seven years into a Canadian housing boom that many have warned will end in a bust, there are signs of a sales slowdown in the two hottest cities, with some economists and real estate agents saying the peak has passed.

A cooling of sales activity in Toronto and Vancouver, the two tent poles holding up an otherwise soggy national housing market, could bring the two markets into line with the rest of the country's tepid economy.

It would be welcome news to homebuyers who have struggled to win bidding wars in the two cities, which represent about 54 percent of the Canadian housing market. Even some real estate agents welcome the idea of a calmer market.

"A few months ago the dogs - the less desirable units that a year ago nobody was bidding on - they were going with multiple offers ... that's definitely slowed," said Pete Shpak, a Vancouver agent.

"I have seen a couple (homes) lately, though, that I thought would go into multiple offers, but didn't," he added.

Prices are still up dramatically over the past five years in both cities, rising 41 percent in Vancouver and 45 percent in Toronto, according to the Canadian Real Estate Association (CREA).

But seasonally adjusted residential sales in Toronto fell by 1.8 percent in March from February and were flat in April, while Vancouver sales slipped 0.3 percent in March and 1.0 percent in April. Activity was still well up from a year ago.

"There are reasons to believe maybe we've hit the peak in those two markets," Gregory Klump, chief economist for CREA, said on Friday. "But I expect them to remain strong."   Continued...