MNI DATA REACT: Tight Canada Housing Supply Boosts Prices

By Greg Quinn

     OTTAWA (MNI) - Canada's housing market remained tight in January with

average prices rising the most since mid-2016 and measures of the inventory of

properties for sale the lowest in more than a decade.

     The average price of $504,350 was up 11.2% from a year earlier, the

Canadian Real Estate Association said Friday from Ottawa. The Toronto area is

among the hottest markets while declines in Vancouver are fading, with

quality-adjusted prices in both cities up more than 50% from five years ago.

     The return of housing market strain is a big reason the BOC is reluctant to

cut the G7's highest interest rate of 1.75%, because faster growth now could

come at the expense of a bigger setback down the road. Toronto and Vancouver

markets have surged and it's unclear how much is being fed by rising populations

and incomes versus speculators. The gains come after regulators imposed a

tougher stress test on new mortgage loans. 

     "Barring an unforeseen change in recent trends between the balance of

supply and demand for homes, price gains appear poised to accelerate in 2020,"

the CREA report said. 

     The 4.2-month inventory of homes for sale was unchanged from December at

the lowest since mid-2007. That's a full month below the long average. The total

number of new listings was little changed near the lowest in a decade.

     The biggest sales decline in about a year of 2.9% in January did little to

shift the balance of power between buyers and sellers, CREA said. Sales rose

11.5% from a year earlier including a 43% jump in Vancouver.

--MNI Ottawa Bureau; +1 613-314-9647; email: greg.quinn@marketnews.com

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