MNI:Canada Jan Home Resales Rebound But Y/Y Price Growth Slows

By Yali N'Diaye      

     OTTAWA (MNI) - Canada's existing home sales unexpectedly rebounded in

January, rising 3.6% after three months of declines, the Canadian Real Estate

Association reported Friday.

     However, the rebound might not reflect a turnaround just yet, as details of

the report suggest.

     On a 12-month unadjusted basis, existing home sales were still down 4.0%,

the weakest month of January since 2015. Sales plunged 39.3% in Greater

Vancouver, and edged down 0.2% in Greater Toronto.

     Furthermore, despite the monthly sales recovery, year-over-year price

growth further slowed in December, with the MLS Home Price Index up 0.8%, the

smallest increase since June 2018. 

     With more stringent stress tests, buyers have turned to more affordable

housing alternatives, which has benefitted condominiums, likely explaining the

3.3% gain in apartment prices while one-story single-family home prices fell

1.1%.

     On a monthly basis, the HPI was down 0.5%, with Greater Vancouver down 1.2%

and Greater Toronto down 0.3%. The national average price fell 2.9% in December

to C$471,112 from C$484,950 in November.

     "Homebuyers are still adapting to tightened mortgage regulations brought in

last year, "said CREA President Barb Sukkau.

     Chief Economist Gregory Klump stressed the regional divergences, with the

Prairies - the regions most impacted by oil price trends and facing elevated

supply relative to sales - experiencing weaker conditions, along with the Lower

Mainland British Columbia.

     "Sales, market balance and home price trends are out of synch among major

Canadian cities that have the greatest impact on national results," Klump said.

     The number of months of inventory, for instance, an indicator of market

balance, declined to 5.3 from 5.5 the previous month. While the overall reading

is in line with the long-term average, it has "swollen far above its long-term

average in Prairie provinces and Newfoundland & Labrador."

     Meanwhile, the measure remains well below its long-term average in Ontario.

     CREA also reported that the number of newly listed homes rose 1% in

January, led by Greater Vancouver. As a result, the sales-to-new listings ratio

climbed to 56.7% from 55.3%. Compared to long-term averages, half of local

markets are balanced, the report said.

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

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