The harsh winter put a dent in housing sales and prices across Canada, but the market is picking up with the arrival of spring, according to latest housing market reports.
"We are finally seeing the arrival of housing inventory in seasonally appropriate quantities across the nation. When combined with pent-up demand following a particularly long and harsh winter, the stage is set for a robust 2014 spring market,” says Phil Soper, president and chief executive of Royal LePage.
According to a Royal LePage house price survey, released April 8, housing inventory picked up at the end of March. In the first quarter, the average price of a two-storey home increased 5.4 per cent to $428,943, while detached bungalows rose 4.4 per cent year-over-year to $380,765. Overall, the average price of a home in Canada rose between 2.5 per cent and 5.4 per cent.
Hamilton house prices increased in March, but housing unit building projects declining
Although the latest reports are showing a price growth increase, the number of new residential construction projects (housing starts) is actually on a downward trend.
So while house prices for detached bungalows in Hamilton went up four per cent in the last quarter, the amount of new residential units went down from 2,275 in February to 2,221 units in March, according to a Canadian Mortgage and Housing Corporation (CMHC) report released on April 8.
In addition to using a six-month moving average, CMHC also used seasonally adjusted annual rates (SAAR) to measure the trends.
The standalone monthly SAAR was 2,233 units in March, down from 3,128 units in February.
But Abdul Kargbo, CMHC's senior market analyst for Hamilton and Brantford, explains that the decline in new housing projects is not broad based.
“Single-detached construction was remarkably strong in Grimsby, as the township recorded its highest number of single-detached housing starts since August 2007," Kargbo said.
Taking into account a larger geographical area, that is, Hamilton and Grimsby together, housing starts were up, says Kargbo.
If Hamilton follows the rest of Canada, the housing market should see an upward trend for both inventory and price during the spring.