Priciest Canadian Housing Markets Cooling Down-BMO Economics

Priciest Canadian Housing Markets Cooling Down-BMO Economics 
- BMO report shows pricey Vancouver and Toronto housing markets
- Regina and Calgary still seeing solid price gains 
TORONTO, ONTARIO -- (Marketwire) -- 11/23/12 -- While most regions in
Canada are likely to see steadier prices next year, loftier
valuations in Vancouver and, to a lesser extent, Toronto, will lead
to moderate declines, according to a new report from BMO Economics. 
"Recent data show a divergence in home sales between most regions and
the priciest markets," said Sal Guatieri, Senior Economist, BMO
Capital Markets. "Both Vancouver and Toronto - which account for a
combined one-quarter of the national population and home sales - are
seeing sharply weaker sales and some softening in prices, and are
vulnerable to a more material correction in the event of an
unexpected jump in interest rates or drop in employment." 
Mr. Guatieri noted that both the Vancouver and Toronto housing
markets are having a bumpier ride than elsewhere in Canada. According
to the report, Vancouver's sales have plunged 27 per cent
year-over-year in the three months to October. With almost three new
property listings for every one sold, buyers are sitting in the
driver's seat, lowering prices 3 per cent since the spring.  
Meanwhile, Toronto's housing boom is also cooling. Resale
transactions declined 16 per cent year-over-year in the three months
to October - and slightly faster in the first half of November -
while prices are down 1 per cent since the spring. While prices in
the detached market are still up 6.5 per cent year-over-year to
October, the pace has slowed and appears to have eased further in
Mr. Guatieri noted that after a decade-long boom, the long-awaited
soft landing appears to be underway in most markets. "In many
provinces, while resales are down from last year, they remain healthy
at near the past-decade mean. In fact, sales are still high in
Saskatchewan and have strengthened in Alberta, the two fastest
growing provinces. Similarly, while price growth has slowed, it is
still positive, with a few cities - such as Regina and Calgary -
showing solid gains."  
Nationwide, existing home sales have fallen in five of the past six
months to October, while the benchmark
 home price index has moderated
to 3.6 per cent year-over-year from 4.3 per cent in 2011. 
Sameh Elrefaei, Head of Mortgage Products, BMO Bank of Montreal,
added that regardless of the market conditions, making a responsible
home financing decision should be top of mind for prospective buyers. 
"While some areas may be beginning to favour the buyer, valuations
often fluctuate over the long term," said Mr. Elrefaei. "Those
looking to get into the housing market should continue to treat the
purchase of a home as a long-term investment decision."  
Mr. Elrefaei added that homebuyers should consider taking the
shortest amortization possible and stress-test their mortgage against
a higher interest rate to ensure they can afford what they've signed
up for over the long-term. 
About BMO Financial Group  
Established in 1817 as Bank of Montreal, BMO Financial Group is a
highly diversified North American financial services organization.
With total assets of $542 billion as at July 31, 2012, and more than
46,000 employees, BMO Financial Group provides a broad range of
retail banking, wealth management and investment banking products and
Media Contacts:
Peter Scott, Toronto
(416) 867-3996 
Matt Duffin, Toronto
(416) 867-3996 
Valerie Doucet, Montreal
(514) 877-8224 
Laurie Grant, Vancouver
(604) 665-7596 
Twitter: @BMOmedia
Press spacebar to pause and continue. Press esc to stop.