Canadian home sales drop in January
February 17, 2010
Tony Wong
BUSINESS REPORTER
Home sales across Canada dipped by 2.8 per cent in January from the near record levels reported in December, suggesting the market may be cooling.
There were 46,394 existing homes sales last month, compared to 48,144 in the prior month, according to figures released by the Canadian Real Estate Association today. All figures are seasonally adjusted.
“January results suggest the national resale market may be past the recent peak,” said CREA chief economist Gregory Klump. “One car doesn’t make a parade, so a few more months of results showing a cooling trend will be required before talk of a Canadian housing bubble begins to fade.”
Actual (not seasonally adjusted) sales activity in January was up 58 per cent ago from year ago levels. Last January was the lowest level of sales in more than a decade.
Despite the dip in sales, prices continued to rise significantly. Average residential price was up by 19.6 per cent to $353,129.
New listings also rose slightly by three tenths of one percent on a month over month basis in January to reach the highest level since November of 2008.
“It could take until the second half of the year before a cooling trend becomes evident,” said Klump.
Home buying activity is expected to be elevated in the first half of the year as home buyers rush to get in the market to be approved for mortgages before new mortgage rules take place.
Expected interest rate increases and the introduction of a Harmonized sales tax are also set to take place in the second half of the year.