According to figures just released by the Canadian Real Estate Association (CREA), the average selling price of Canadian real estate increased slightly in February compared to a year earlier. The average price of a home sold in Canada last month was $372,763, which is 2% more than February 2011.
The number of real estate sales increased by 1.4% on January, and sales activity rose in more than half of all local markets. The top performing markets were Calgary, Toronto, Barrie, Montréal, Québec City and St John. All in all, 61,772 homes have been sold through the first two months of this year, which is 6.7% more than during the first two months of 2011.
According to the president of the CREA the increase in sales activity and the number of homes for sale shows Canadians still have confidence in the housing market. In spite of the fact that house prices are still increasing, the market has definitely softened over the last few months, as for much of last year annual house price rises were in double digits. However a lot of this was due to the real estate market being skewed by activity in Vancouver, but this hasn't had so much of an effect recently. The CREA now thinks other factors are keeping national house prices up, in particular the market in Toronto which is being driven by the balance between supply and demand. Toronto is now seeing some of the largest price gains in the country, and single, detached family homes are proving to be particularly popular.
In spite of continued mutterings about a housing bubble forming in the country, it looks more likely that the real estate market will have a soft landing. During the next couple of years new home construction is predicted to slow down slightly, especially as there is still an oversupply of condominiums in some markets, most notably Vancouver and Toronto. The CREA is already anticipating that housing prices and sales will be flat over the next couple of years.