With new mortgage rules, a new harmonized sales tax in some provinces and the possibility of higher interest rates set to kick in this summer, home buyers are on a tear that is likely to keep markets busy leading to this summer, according to the Re/Max Market Trends Report 2010 released Wednesday.
The report, which examined real estate trends in 16 markets across the country, found that unusually strong activity in January -- traditionally one of the quietest months of the year -- has led to a sharp decline in active listings in 81 per cent of markets surveyed. Too many buyers and not enough homes will probably be the problem, according to the report.
Markets experiencing the tightest inventory levels include Toronto (down 41 per cent), Kitchener-Waterloo (down 33 per cent), Ottawa (down 30 per cent), Victoria (down 30 per cent) and Metro Vancouver (down 27 per cent), which also had some of the highest year-over-year sales gains.
The highest year-over-year sales gains were reported in Metro Vancouver (152 per cent), Kelowna (121 per cent), Greater Toronto (87 per cent), Victoria (69 per cent), Hamilton-Burlington (58 per cent), London-St. Thomas (55 per cent) and Calgary (47 per cent), the report said.
However, those figures for Metro Vancouver represented a slowing in sales in January when compared to the overheated final quarter of 2009, Cameron Muir, chief economist for the B.C. Real Estate Association, said in an interview.
"If you look at the sales-to-active-listings ratio, which is the measure of hotness or coolness of the market, we saw that come down in January," Muir said.
Metro Vancouver's ratio of sales listings hit 26 per cent in January, meaning that sales for the month were the equivalent of 26 per cent of the total inventory available, which is almost within balanced market conditions, according to Canada Mortgage and Housing Corp. definitions.
During the last three months of 2009, sales equalled 31 to 33 per cent of homes available in inventory, which was seller's-market territory.
Muir said the last time Metro Vancouver's sales-to-active-listings ratio was as high as it was in the fourth quarter of 2009 was midway through 2006. January's year-over-year decrease in active listings was compared to a month that had a high number of houses on the market.
"But last month we saw sales edge lower, we see active listings edge a bit higher and new listings are fairly healthy in the marketplace," he said.
Western Canada dominated the list of centres with the greatest increases in price, with Victoria home prices jumping 25.5 per cent in January compared with the same month a year before. Kelowna jumped 22 per cent and Greater Vancouver rose 19.5 per cent. St. John's saw an increase of 23 per cent and Toronto rose 19 per cent.
