By Andrea Hopkins
TORONTO, March 17 Sales of existing homes in
Canada edged higher in February from January, the first monthly
increase after five straight declines, the Canadian Real Estate
Association said on Monday, but it trimmed its sales forecast
for this year.
The industry group for Canadian real estate agents said home
resales were up 0.3 percent last month from January, seasonally
adjusted. On a year-on-year basis, sales rose 1.9 percent from
February 2013, not seasonally adjusted.
Canada's housing market slowed in the final months of 2013
and analysts are waiting to see whether sales will rise again in
the spring, the traditional start to the home-buying season. The
number of sales in February was 9.3 percent below the peak
reached in August 2013, but prices have generally continued to
In a separate report, CREA cut its forecast for 2014 sales
to 463,700 units, a 1.3 percent increase from 2013. In its
previous quarterly forecast in December, CREA had expected sales
of 475,000 units in 2014, a 3.7 percent increase from 2013.
The group forecast 2015 sales at 469,400, up a further 1.2
Canada escaped the U.S. housing crash after the 2008-09
financial crisis and home prices have risen dramatically, if not
steadily, in the past five years despite federal government
moves to tighten mortgage lending rules.
While some economists have predicted the Candian market will
crash, most have said they expect sales and new construction to
level off in 2014 and 2015 as mortgage rates rise, with prices
continuing to tick slowly higher.
"(CREA's) forecast for 2014 is broadly consistent with our
own slightly more constructive estimate of 2.3 percent, but we
see sales effectively flat in 2015," Mazen Issa, senior Canada
macro strategist at TD Securities, said in a research note.
CREA said it expects the national average home price to rise
3.8 percent to C$397,000 ($358,100) in 2014, and rise a further
1.1 percent in 2015 to C$401,400.
CREA's home price index rose 5.1 percent from February 2013,
a slight acceleration from January's 4.8 percent gain.
The number of regional housing markets where February sales
were up ran roughly even with the number of markets where sales
declined, with little change in activity in most large urban
markets, the group said.
"Sales in February rebounded in some of the smaller local
markets where activity was impacted by harsh winter weather in
January," CREA President Laura Leyser said in the report.
"The strength of sales activity during the crucial spring
market period will be influenced by the availability of
listings, which varies considerably from market to market."
The number of newly listed homes was up 0.6 percent in
February from January. As with sales, there was a roughly even
split between the number of local markets where new listings
were up from the previous month and those in which they were
down, the report showed.
The national sales-to-new listings ratio was 52.1 percent,
little changed from 52.3 percent in January. Since early 2010,
the ratio has remained within a range of 40 to 60 percent, which
marks balanced territory.
The national average price for homes sold in February, not
seasonally adjusted, was C$406,372 ($366,500) an increase of
10.1 percent from the same month last year.
CREA's home price index, up 5.1 percent, from a year
earlier, provides a better gauge of price trends because it is
not affected by changes in the mix of sales activity the way
that average price is.