MNI DATA IMPACT: Canada Home Resales Fall To 6-Year Low

By Yali N'Diaye      

     OTTAWA (MNI) - Canada's existing home sales plummeted 9.1% in February

following a 3.6% gain in January, reaching their lowest level since November

2012, the Canadian Real Estate Association reported Friday.

     Both prices and activity indicators were weak, which should leave to Bank

of Canada firmly on the sidelines, in search for further clarification about the

state of the country's housing market.

     Sales have been down 4 of the past 5 months. "The housing sector is on

track to further reduce waning Canadian economic growth," warned CREA Chief

Economist Gregory Klump.

     Housing organizations have called on regulators to dial back on rules that

were sharply tightened in January 2018, with the introduction of stringent

stress tests that reduced the number of qualified buyers, while also redirecting

them toward lower-value homes.

     Sellers were also on the sidelines in February, as the number of newly

listed homes fell 3.2%, led by the Greater Toronto Area. Still, 70% of local

markets were balanced in February, CREA estimated.

     The number of months of inventories, another indicator of the balance

between sales and listings, climbed to 5.7 months from 5.3 months, reaching a

three-and-a-half-year high.

     --LOWER PRICES

     Weakness in the housing market also showed at the price level, with the

Aggregate Composite MLS Home Price Index -0.1% year-over-year, the first decline

in nearly ten years, driven down by single-family homes.

     The national average price decreased 1.8% on the month to C$459,331, for a

5.2% drop year-over-year unadjusted.

     CREA now expects sales to fall 1.6% in 2019, led by British Columbia,

before recovering 2.0% in 2020.

     The average price is expected to depreciate by 0.2% in 2019, before

recovering 0.8% next year.

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

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