Sales of existing homes in Canada during the first quarter reached its highest level in a year due mostly to the voracious demand for houses in Vancouver and Toronto. 

The Canadian Real Estate Association said seasonally adjusted national sales activity in the first quarter was up 4.5 per cent over the previous quarter, and reached the highest quarterly level in a year as national sales in each of the first three months ran close their five- or 10-year monthly averages.

The association said most of the quarterly increase was due to demand in Vancouver and Toronto. A change to mortgage regulations on March 18 may have pushed up the sale of a number of homes in some of Canada's more expensive housing as sellers looked to "tradeup" before the changes took effect.

New mortgage rules announced by the Finance Department in January and took hold last month made the maximum payback period 30 years — resulting in somewhat higher regular payments than with the 35-year amortization that has been the choice of about 30 per cent of home buyers.

The rule changes increases the monthly payment on a $300,000 mortgage at four per cent interest by $105, but also reduces total interest paid by $42,288 over the life of a mortgage because it is repaid five years sooner.

The rush to buy in advance of the changes caused an artificially high price for newly listed homes as the national average price was skewed higher by strong activity in a few pricey areas of Greater Vancouver where the activity focused on condo sales. In March alone, house prices jumped 8.9 per cent year-over year.

"A record number of multi-million dollar property sales in Richmond and Vancouver West are pushing up average prices for Greater Vancouver, British Columbia and nationally," Gregory Klump, CREA's Chief Economist, said in a release.

If Vancouver is excluded, the national average price gain was cut in half to about 4.3 per cent.

But Klump said the impact of the mortgage changes are likely to be "minor over the near term." Instead, he said the widely expected view that the Bank of Canada will not raise interest rates until at least July "is supportive for resale housing demand, market balance and prices."

The central bank held its key lending rate at one per cent earlier this week.

Information provided by http://www.cbc.ca/news 

Bank of Canada Governor Mark Carney held his benchmark interest rate at 1 per cent Tuesday, balancing a stronger-than-expected domestic recovery against ongoing global threats and the Canadian dollar’s dampening effect on exports and inflation.

In explaining the decision to leave borrowing costs alone for the fifth consecutive meeting, as expected, the central bank hinted that it is getting ready to resume a tightening campaign some time in the coming months, by softening a reference in its statement to the amount of slack in the economy and saying it would be chewed up more quickly than expected. 

Information provided by www.theglobeandmail.com 

Kelowna, BC – The Central Zone of the Okanagan Mainline Real Estate Board (OMREB) reported March 2011 sales activity of all MLS® property types improved over last month but dipped compared to sales reported at this time last year when buyers were spurred into the market early in the first quarter to avoid the impending HST.  The local housing market continues to stabilize and show more balanced conditions moving into Spring.