Home sales slow in February

The number of listings sold through the Multiple Listing Service Systems (MLS) dropped slightly in February, signaling a more balanced national resale housing market, says the CREA.

But cost of home ownership still expected to rise

The number of real-estate listings sold through the Multiple Listing Service Systems (MLS) dropped slightly in February, signaling a more balanced national resale housing market, according to the association that governs it.

The Canadian Real Estate Association's (CREA) new statistics show a surge in home listings but a drop in sales of 1.5 per cent between January and February. Most of the buying activity centered in Toronto, while Vancouver's sales dropped the most sharply.

The seasonally-adjusted number of new  listings in February rose 2.4 per cent over the previous month to 73,849 units — the highest number since October 2008.

"Activity is expected to remain elevated in Ontario and British Columbia over the first half of the year, with buyers looking to beat the introduction of the HST and expected interest rate hikes," said CREA president Dale Ripplinger, in a release.

The Harmonized Sales Tax, a 13 per cent sales tax, comes into effect in July in Ontario.

According to the CREA report, the average price of a home was $335,655 in February — up 18.2 per cent year-over-year.

According to new data released by the Royal Bank of Canada Monday, home affordability detoriorated considerably at the end of 2009, as home prices rose.

"The effect of higher prices was largely mitigated by a small decline in mortgage rates and continued gains in household income," Robert Hogue, a senior economist with RBC, said in a release.

The report predicts that the cost of home ownership will continue to increase due to a high demand for homes and a limited number of homes on the market.

"The anticipated and gradual rise in interest rates indicates that affordability is likely to gradually get worse as rates return to normal levels," said Hogue.