A number of real estate boards across the country have recently released their June sales numbers and the news is not good. Sales are down across the board with a whopping 30.2% drop in June sales numbers (compared to a year earlier) in the previously frothy Vancouver real estate market near the front of the pack.
While the news for Vancouver homeowners trying to sell is bad they are not alone in feeling the pain. Toronto saw it’s sales numbers drop 23% over the same time a year earlier and Calgary saw their existing home sales drop a whopping 40% over a year earlier and is down 16% compared to May. Other markets are also feeling the pain albeit more moderately such as Ottawa which saw a 15% drop in sales in the region in June.
Air Is Coming Out Of Home Sales
It doesn’t take a brain surgeon to realize that some of the air is coming out of the sails of the housing market in Canada. It’s a bit of a mystery what has taken things this long to slow down given the slowdown in the economies of Canada’s top trading partners the US, Europe, Japan and China. The demand for Canada’s commodities especially from China and Asia has helped Canada avoid much of the pain that the global economic slowdown has wrought but there are signs the stimulus efforts in China and the US are running out of steam.
On the Canadian front interest rates near record lows and seemingly upbeat numbers being touted by Canada’s major news outlets daily has not been enough to keep the real estate bubble from starting to burst. The question quickly becomes after two straight months of disappointing sales numbers since the institution of the new tighter mortgage rules issued by Finance Minister Flaherty have we seen the peak in the Canadian real estate market and are we in for a mild or deep correction in the coming months and years.