By Andrea Hopkins
TORONTO Oct 15 Sales of existing homes in
Canada rose in September from August, notching the first monthly
gain since March, the Canadian Real Estate Association said on
Monday, but year-over-year sales dropped sharply in another sign
Canada's hot housing market is cooling.
The industry group for Canadian real estate agents said
sales activity was up 2.5 percent in September from August.
Actual sales for September, not seasonally adjusted, were down
15.1 percent from a year earlier.
CREA's Home Price Index rose 3.9 percent in September, its
smallest gain since May 2011.
The group said new mortgage rules, introduced by the federal
government in July to restrain borrowing, have kept a lid on
sales activity, a trend that is expected to carry through the
final months of 2012.
"National activity is likely to remain down from year-ago
levels over the fourth quarter of 2012," Gregory Klump, CREA's
chief economist, said in a statement.
"While some first time home buyers may no longer qualify for
mortgage financing under the new rules, it is likely that many
others are stepping back and reassessing how much house they can
realistically afford, which is one of the things new mortgage
rules were designed to do," he added.
Mindful of the U.S. housing market crash that triggered the
global financial crisis, Finance Minister Jim Flaherty in June
tightened rules on government-backed mortgages for the fourth
time in four years. The changes took effect July 9.
The September gain marked a partial recovery from the 6.2
percent monthly drop recorded in August.
CREA said activity picked up in about 60 percent of local
markets in September, including Vancouver, Calgary, Edmonton,
Toronto and Quebec City.
National sales reached 110,376 units in the third quarter of
2012, down 6.5 percent from the previous quarter. A total of
366,353 homes have traded hands over Canadian MLS Systems so far
this year, up one percent from levels reported over the first
nine months of 2011.
The national sales-to-new listings ratio, a measure of
market balance, stood at 49 percent in September, remaining near
the midpoint of a balanced market, CREA said.
The national average price for homes sold in September, not
seasonally adjusted, was C$355,777 ($363,500), up 1.1 percent
from the same month last year. The 3.9 percent increase in the
composite House Price Index was the fifth time in as many months
that the year-over-year gain shrank.