Canadian Residential Real-Estate Activity Plunged in January

Cornelia Mascio
Febbraio 15, 2018

Resales of Canadian homes dropped 14.5 per cent in January from December to the lowest monthly level in three years as tighter mortgage rules doused demand, the Canadian Real Estate Association said on Thursday.

The industry group said actual sales, not seasonally adjusted, fell 2.4 per cent from January 2017, while home prices climbed 7.7 per cent from a year earlier, according to the group's home price index.

December sales hit the highest monthly level on record, citing a "pull-through" of transactions as buyers rushed to get deals done in advance of the new mortgage rules kicking in on January 1, said CREA.

"The piling on of yet more mortgage rule changes that took effect starting New Year's Day has created homebuyer uncertainty and confusion", CREA President Andrew Peck said in the report. The changes mean fewer buyers qualify for loans.

The rules likely also contributed to a sharp drop in the supply of home for sales in January.

CREA says activity decreased in three-quarters of all local markets in Canada and most of the large declines came from the Great Golden Horseshoe markets. New listings plunged 21.6 per cent during the first month of 2018, the lowest level since the spring of 2009.

CREA says year-over-year sales were only down 2.4 per cent, but the average price of a home rose by 2.3 per cent when compared with last year.

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