Metro housing fares well

Published Wednesday, August 18, 2010
FREDERICTON - Despite seeing a decline in selling prices and sales, the Metro Moncton real estate market outperformed the rest of Canada in 2009, according to statistics released this week by the Canadian Real Estate Association (CREA).Robert Kavcic, an economist with BMO Capital Markets, says the Hub City's performance during the past year has been relatively stable.

"It's quite a bit better actually than both Canada as a whole and Atlantic Canada. It's definitely better performance than Canada-wide," he says.

"I think the more important thing is there's much more stability in sales, relative to the rest of the country and new listings actually falling quite a bit, year-over-year, which helps to balance the market."

From July 2009 to July 2010, existing home sales in Moncton were down 13.8 per cent. Prices were down 0.3 per cent and the number of new listings were down 7.9 per cent

By comparison, Canadian residential sales were down 30 per cent. The average price rose one per cent during the year, but that amount was dampened by low sales in the country's biggest markets.

"It's a situation where the market is soft and if the sellers aren't getting what they had hoped for, they seem to be in a position to just pull the listing and not sell the house," Kavcic says, adding that the Canadian market is in a different position than that south of the border.

"It's a much different situation than in the U.S., where a lot of those sales are forced. Here that's simply not the case and that's probably one of the reasons we saw such strength in prices during the past year."

At five per cent, new Brunswick had the fifth-largest increase of any province from July 2009 to 2010, while Nova Scotia and Prince Edward Island were the only provinces to show a decline in average residential price.

Canadian home sales were down 6.8 per cent from June to July. About 85 per cent of July's decline can be traced to fewer sales in B.C. and Ontario - which generally account for more than half of national sales - as the new harmonized sales tax prompted many buyers to push sales into the first half of the year, CREA president Georges Pahud says.

"The soft sales figures we're seeing right now can be attributed in part to accelerated home purchases earlier in the year," he says.

Sales activity peaked in December 2009 and hovered near record levels during the first quarter of this year as buyers rushed into the housing market ahead of changes to mortgage rules, interest rate hikes and the HST.

British Columbia had the biggest drop-off at 14.1 per cent, followed by Ontario with an eight per cent decline. Meanwhile, sales in the Prairies and Quebec were on par with June levels.

The average price of homes sold through CREA's Multiple Listing Service in July was $330,351, up one per cent from a year ago - the smallest increase since prices began to rise in May 2009.

Meanwhile, July saw the steepest decline of new listings in over a decade - down 7.2 per cent from June.

* with files from the Canadian Press.