MNI: Canada Home Resales -1.6% in October, M/M Prices Down

By Yali N'Diaye      

     OTTAWA (MNI) - Existing home sales declined for the second consecutive

month in October, when they fell 1.6% after edging down 0.2% in September, The

Canadian Real Estate Association reported Thursday, reflecting divergent

movements.

     As the government introduced tighter mortgage underwriting rules in

January, existing home sales contracted in the first four months of the year,

before stabilizing over the following four months through August. That momentum,

however, has now lost steam, with actual unadjusted sales down 3.7%

year-over-year.

     CREA Chief Economist Gregory Klump attributed the weakness to urban centers

in Ontario's Greater Golden Horseshoe region that was not offset by higher sales

in Lower Mainland of British Columbia.

     Overall sales in Ontario fell 2.2% on the month, including a 1.1% decrease

in Greater Toronto, while they increased 1.4% in British Columbia, including a

2.0% gain in Greater Vancouver.

     Indicators overall pointed to a slight shift to softer market conditions in

October.

     The number of months of inventory edged up to 5.3 months from 5.2 in

September, and the number of listings fell 1.1% over the month to 71,437.

     The national sales-to-new listings ratio in October edged down to 54.2%

from 54.4% the previous month, with two thirds of local markets still in

balanced conditions, according to CREA.

     From a price standpoint, the average national price edged down 0.2% to

C$498,515. On a 12-month unadjusted basis, the average price fell 1.5%.

     The Aggregate Composite MLS Home Price Index was down 0.1% on the month,

although it was still up 2.3% from October 2017.

     Separately, Teranet and the National Bank of Canada reported Thursday that

their home price index fell 0.4% on the month, pointing out that a decline in

October "is not the norm", as this was only the fourth time in 20 years.

     "The most striking aspect of the retreat is its diffusion," said the

Teranet-National Bank of Canada report. "For the first time since December 2014,

the component indexes for 10 of the 11 metropolitan markets surveyed were down

on the month," including Toronto (-0.2%) and Vancouver (-0.8%).

     The 12-month 2.8% price gain benefited from a base effect.

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

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