A lack of available purchase properties will be the greatest challenge to the real estate market when it begins to heat up this spring, according to a new report.
The new report from Re/Max says January -- traditionally one of the quietest months of the year for home sales -- was "unusually strong."
That means the number of active listings in many markets is sharply down from normal, setting up a potentially frustrating spring buying season as buyers fight over fewer properties.
The Re/Max Market Trends Report 2010 surveyed 16 markets in Canada. It found that the coming Harmonized Sales Tax in B.C. and Ontario, fears of rising interest rates and tighter lending rules, have triggered activity earlier than normal and drawn more purchasers into the market.
"We're in for a heated spring market that will, in all probability, spill over into the summer months, as the window of opportunity draws to a close," said Michael Polzer, executive vice president of Re/Max's Ontario-Atlantic Canada division, in a release.
"The supply of homes listed for sale has been drastically reduced, housing values are once again on the upswing, and banks and governments are moving in unison toward stricter lending policies."
The Toronto and Kitchener-Waterloo markets are among those feeling the most dramatic effects of the different factors affecting inventory. In Canada's largest city available-for-purchase housing was down 41 per cent, and in Kitchener-Waterloo it was down 33 per cent.
Here are some other coast-to-coast numbers from the report:
- Ottawa: -30 per cent
- Victoria: -30 per cent
- Greater Vancouver: -27 per cent
- Halifax-Dartmouth: -19 per cent
- London-St.Thomas: -18 per cent
- Regina: -16 per cent
- Winnipeg: -13 per cent
In Calgary, total MLS listings were down 26 per cent and Edmonton's active listings were down 26 per cent, the report says.
The declines in inventory were linked to significant increases in year-over-year sales in most markets. Greater Vancouver, for example, showed a staggering 152 per cent increase in sales.
Here are some additional year-over-year sales gains:
- Kelowna: 121 per cent
- Greater Toronto: 87 per cent
- Victoria: 69 per cent
- Hamilton-Burlington: 58 per cent
- London-St. Thomas: 55 per cent
- Calgary: 47 per cent
Housing price increases showed some significant gains as well, particularly in the West, where Victoria prices were up 25.5 per cent and, Kelowna 22 per cent and Greater Vancouver 19.5 per cent.
Elsewhere, Greater Toronto's prices were up 19 per cent, Winnipeg 17 per cent and 23 per cent in St. John's.
The report suggests that a growing lack of affordability combined with factors such as rising interest rates, the HST in some provinces, and anticipation of the spring buying frenzy, potential buyers are anxious to make their purchases as soon as possible.
"The level of frustration is growing, as pent-up demand builds," Polzler said. "For every successful offer, there are those that will walk away empty-handed. They're thrust back into the buyer pool and the process starts all over again.
