CREA: Sept Home Resales +2.1%; House Price Gains Slow

By Yali N'Diaye   

     OTTAWA (MNI) - Existing home sales rose 2.1% in September, in what The

Canadian Real Estate Association qualified Friday as a "stabilizing" market,

with activity up in roughly half of markets, led among others by the greater

Vancouver and Toronto areas.

     On a 12-month unadjusted basis, sales fell 11.0%, CREA said, reporting

declines in three-quarters of local markets, led by Greater Toronto.

     On the price front, gains decelerated for for fifth consecutive month,

including in Greater Toronto, with the national Aggregate Composite HPI up 10.7%

year-over-year.

     "The deceleration in price gains largely reflects softening price trends in

Greater Golden Horseshoe housing markets tracked by the index," the report said.

     Looking at the national average price, it was up 2.8% year-over-year

unadjusted. On a monthly adjusted basis, the national average price rose 1.5% in

September to C$501,335.

     While CREA President Andrew Peck said he was "encouraged" by the

stabilizing signs of the market, the association's chief economist, Gregory

Klump, stressed that "Further tightening of federal regulations aimed at cooling

housing markets in Toronto and Vancouver risks creating collateral damage in

markets elsewhere in Canada." He added, "It also jeopardizes Canadian economic

growth, which is already showing signs of fading." 

     Looking at indicators of the supply-demand balance, new listings rose 4.9%

on the month to 73,812, with the sales-to-new listings ratio edging down to

55.7% from 57.2%, which remains within the range that is consistent with a

balanced market. When comparing to the long-term average, CREA said two-thirds

of local markets wee in balanced territory in September.

     Meanwhile, the number of months of inventory remained stable at 5.0 months,

"broadly in line with the long-term average."

     Going forward, TD Senior Economist Michael Dolega expects in a note that

higher mortgage rates will cool down the market and slow price growth. TD

expects the Bank of Canada to hike rates one more time this year.

     Beyond the near-term weakening through mid-2018, however, "activity should

begin to rebound thereafter given the fundamentally supported demand related to

strong job growth and strengthening wage dynamics."

--MNI Ottawa Bureau; +1 613 869-0916; email: yali.ndiaye@marketnews.com

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