On Friday June 15th, 2012 the Canadian Real Estate Association released a lot of figures that gave a lot of insight into the direction of the real estate market in Canada. One focus on this round of figures was around the Toronto housing market and how it was staying quite strong.
“Activity in Greater Toronto is stronger this spring than it was last year, and higher-priced homes are still selling quickly. As Canada’s most active housing market, and one of the priciest, it is still the biggest factor boosting the national average price but its support was less of a factor in May,” said Gregory Klump, CREA Chief Economist.
The Bank of Canada doesn’t seem to be exactly thrilled about the pace of borrowing on buying houses and price increases however. In the Montreal Gazette the federal Finance Minister Jim Flaherty was noted as warning Canadians against moderate borrowing saying that household debt was the number one enemy for the domestic economy.
The sales activity in houses was raised from previous announcements after more than expected rises this spring in home sales activity. The first announcements said that sales would increase about .3 percent but readjusted estimates put sales of homes at 475,800 homes in 2012 up 3.8 percent from the figures in 2011.
Concern and talk about a housing bubble is still on the mind of many economists for the Canadian Real Estate Market. While CREA hasn’t come out and said they fear that, many others have been discussing it. Looking at the Canada home prices in the graph below clearly shows a rising average price of Canadian houses that could spell out a bubble if financial markets get any kind of shocks. Banking analysts are on edge this weekend as Greek elections in Greece could spell an exit from the Euro wreaking havoc on markets.