Data on Canadian home sales for August will be released Monday morning.MIKE CASSESE/Reuters
The Globe's Real Estate Beat offers news and analysis on the Canadian housing market from real estate reporter Tara Perkins. Read more on The Globe's housing page and follow Tara on Twitter @TaraPerkins.
Data on Canadian home sales for August will be released Monday morning at 9 a.m. EST, and will likely show that the market is strong for this time of year, although not quite as strong as it was in prior months.
"Canada's housing market lost a bit of steam toward the end of summer, with sales expected to have risen 4.5 per cent year-over-year in August, which would mark the slowest pace in three months," Bank of Montreal economist Benjamin Reitzes wrote in a research note.
That makes sense since this past winter's unusually cold weather delayed the start of the traditional spring home selling season, which is the busiest time of year for the market. Pent-up demand from hibernating would-be buyers was still being unleashed in June and July. But that wasn't the only driver of demand, with economists saying that the strong sales levels of the early summer more than made up for the sluggish winter.
"Low rates and still-favourable demographics continue to drive sales," Mr. Reitzes wrote in his research note Friday. "Indeed, as long as rates remain at rock-bottom levels, housing isn't likely to weaken much, if at all."
In fact if his predictions are correct then August's home sales activity will be at the highest level since early 2010. He expects that the monthly sales will be 1 per cent higher than July's on a seasonally adjusted basis, which would mark the seventh month-over-month gain in a row after a five-month losing streak.
His forecast calls for the average selling price of a home in Canada to come in 6 per cent higher than August 2013, which would signal faster price growth after a few months of deceleration. He anticipates that the MLS home price index, which seeks to create a more apples-to-apples comparison of prices than the average can, will have also accelerated to a 5.5-per-cent year-over-year gain.
"There remain pockets of strong demand with double-digit sales growth in Vancouver and London/St. Thomas," he wrote. "Calgary has cooled from its torrid pace to a more reasonable 5 per cent, while Toronto is even more subdued, seeing a low single-digit gain."