If current trends continue, 2007 will be record year for sales
Province
OTTAWA — House prices across the country have hit new record highs this year, but higher lending rates could slow down the rise in home buying, according to an industry report.
In June 2007, the average house price was $315,332, a rise of 11.2 per cent from a year earlier, the Canadian Real Estate Association said.
This was the greatest yearly increase since August 2006.
According to CREA, average prices in June broke all previous monthly records in Alberta, Saskatchewan, Ontario, New Brunswick, Nova Scotia, and Newfoundland and Labrador.
At $446,893, the average price of a house in B. C. rose 11.2 per cent in 12 months maintaining its position at the top of the table, well ahead of Alberta at $364,072.
But Alberta is making rapid gains with an increase of 24.7 per cent since June 2006, only just behind the increase in Saskatchewan, where the average price of a house rose 34.9 per cent to $180,934 and a 28.8-per-cent increase in the Northwest Territories.
Sales activity set records in the first and second quarters. Sales for January to June of this year were ahead of levels for the same period last year in almost every province.
Sales activity in the first half of 2007 rose by 8.2 per cent compared to the same period in 2006 to 287,862 units. If current trends continue, 2007 will be a record year for sales.
Seasonally adjusted national sales activity rose to 133,612 units in the second quarter of 2007, a gain of 3.3 per cent on the previous quarter to reach the highest quarterly level on record.
New quarterly records for sales activity were set in Alberta, Saskatchewan, Manitoba, Ontario, Quebec, New Brunswick and Nova Scotia.
“The bank rate was hiked for the first time in over a year in July, and an additional increase is expected in September. Higher interest rates and additional housing-price increases will gradually impact affordability and housing demand over the second half of the year,” said CREA chief economist Gregory Klump.
“It is important to note that the low interest rates and flexible mortgage insurance options some Canadians have had access to in recent years do not provide all the support necessary for home ownership,” said Ann Bosley, CREA’s president.
“Recent research shows that ownership rates among younger Canadians and newer Canadians have been on the decline, in large part due to lower incomes and difficulty saving funds for a down payment,” she said.
© The Vancouver Province 2007
