Canada Housing Sales Decline Steeply in June

Modesto Morganelli
Luglio 18, 2017

Canada existing home sales fell 6.7% in June after the 6.2% m/m drop in seasonally adjusted May sales, according to the Canadian Real Estate Association. In January, it topped 94 per cent.

One of the biggest reason for the dip in sale of houses is considered to be the imposition of 15% tax on foreign buyers by the Ontario government.

In June, sales were down in 70 per cent of local markets from the previous month, including all markets in Ontario's Greater Golden Horseshoe, British Columbia's Lower Mainland, Kingston, Montreal and Quebec City.

Last month, while the actual benchmark price of a home in the Greater Toronto Area surged 25.3 per cent year-over-year to $810,700, this still represents a slowdown in price growth compared to record levels seen a year ago. However, the region's months of inventory is on the rise, sitting at 2.5 months in June.

On an average-price basis, the cost of buying a home in Canada in June edged 0.4% upward to 504,000 Canadian dollars ($400,000) - although when the Toronto and Vancouver markets are excluded, the average price comes in just shy of C$400,000.

However, Porter and Kavcic say the national average price is skewed as its weight is dominated by Toronto's slowing but elevated activity.

"In lower priced markets, the effect of higher interest rates on housing affordability will be relatively muted". Bank of Canada Gov. Stephen Poloz said last week the rate increase would help reinforce nonrate tools implemented by federal and provincial authorities to date to curb borrowing, and keep housing prices in check.

On a year-over-year basis, half of all local markets saw a decline in sales last month.

The number of newly listed homes slid 1.5% in June, led by a sizable pullback in the Toronto region compared with record levels in April and May. A sales-to-new listings ratio between 40% and 60% is consistent with balanced housing market conditions, the association said.

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