19 August 2010

BC Housing Market Feels Effects of HST in July

OTTAWA (August 16, 2010) - The Canadian Real Estate Association (CREA)says national home sales activity continued to trend down in July 2010. The decline was almost entirely the result of fewer sales in British Columbia and Ontario. A slowdown in demand in these two provinces had been widely expected in July, as many purchases were brought forward into the first half of the year in advance of the introduction of the HST.

Actual (not seasonally adjusted) national sales activity was 30 percent lower in July 2010 compared to last year's record July. Year-to-date transactions are still up 5.6 per cent compared to the first seven months of last year, although this gap is expected to continue to shrink as the year progresses, since activity rose sharply over the second half of last year, reaching levels that are unlikely to be matched in the final five months of 2010.

"The soft sales figures we're seeing right now can be attributed in part to accelerated home purchases earlier in the year," said CREA President Georges Pahud. "Activity may remain at lower levels for some time, but ultimately we expect a more stable market to emerge, with demand coming back into line with economic fundamentals."

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