16 June 2010
As a matter of fact, actual national sales activity was down 4.3% in May from the same month last year. Moreover, it was even lower than in April. It means that because of mortgage rules changes and rising rates the number of sales, planned for May, were pulled into April.
“May decline in new listings and housing starts shows these changes are also influencing the supply side”, – said Georges Pahud, CREA President.
“Supply and demand became more balanced in a few major markets,” said Gregory Klump, CREA Chief Economist. “Today homebuyers have more choice, so they don’t have to hurry with the final decision.
In May the actual number of inventory months was 5.3 months. This is up from 4.8 months in the previous year. (The number of inventory months is the number of months, necessary for selling current inventories at the current rate of sales activity).
“The number of inventory months may increase later because of cooling sales activity,” said Klump. “The number of newly listed homes will decline due to more competitive sales and pricing policy in a few local markets. The forecast for the Canadian economy, employment, and mortgage market trends is still optimistic – supply and demand will become even more balanced. Moreover, Canada will avoid a U.S.-style home price correction.”