CREA says Jan­uary ex­ist­ing home sales rose 58 per cent from a year ear­lier

Cape Breton Post - - BUSINESS -

OTTAWA (CP) — Cana­dian home re­sale vol­umes slipped in Jan­uary com­pared with De­cem­ber but came in far higher than the low­est lev­els in a decade, set in Jan­uary 2009 as the coun­try suf­fered through the global credit crunch and re­ces­sion.

The Cana­dian Real Es­tate As­so­ci­a­tion says 25,671 homes were sold across the coun­try in Jan­uary, up 58 per cent from the same month a year ear­lier when con­sumer con­fi­dence hit a low ebb, dry­ing up buy­ing and lend­ing ac­tiv­ity.

The na­tional av­er­age price for homes listed on CREA’s Mul­ti­ple List­ing Ser­vice was $328,537, up 19.6 per cent from a year ago.

The as­so­ci­a­tion’s re­port was is­sued a day af­ter Fi­nance Min­is­ter Jim Fla­herty an­nounced that tighter rules for mort­gage bor­row­ers will be in­tro­duced in April. He de­scribed it as a mea­sure to pre­vent a bub­ble in the hous­ing mar­ket.

Un­der the new rules, ef­fec­tive April 19, bor­row­ers will have to meet the stan­dards for a five-year fixed-rate mort­gage even if the in­ter­est they will pay ini­tially is lower.

“The re­sale hous­ing mar­ket is be­com­ing more bal­anced in a num­ber of prov­inces,” said CREA pres­i­dent Dale Ripplinger.

“A more bal­anced mar­ket is likely to re­sult in smaller price in­creases go­ing for­ward, with buy­ers in less of a rush due to an in­crease in sup­ply.”

How­ever, com­pared mon­thover-month, sea­son­ally ad­justed home sales were down 2.8 per cent from the strong lev­els re­ported in De­cem­ber, giv­ing a sign that the hous­ing mar­ket could be al­ready start­ing to cool in some re­gions.

Nearly half of the drop was linked to a slow­down in hous­ing sales in On­tario.

“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,” said CREA chief econ­o­mist Gre­gory Klump.

Klump sug­gested that Fla­herty’s new plan and the Har­mo­nized Sales Tax, which re­places pro­vin­cial sales taxes in On­tario and Bri­tish Columbia on July 1, could en­cour­age more Cana­di­ans to en­ter the mar­ket in the first half of the year.

“It could take un­til the sec­ond half of the year be­fore a cool­ing trend be­comes ev­i­dent,” he said.

Re­sale homes were still draw­ing a stronger de­mand for Jan­uary, with 170,199 listed homes on MLS in Canada, a de­cline of 18 per cent over the same time last year, the re­port said.

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