Canada Housing Sales Extend Declines in July

By David George-Cosh Features Dow Jones Newswires

Sales of existing homes in Canada fell in July from the prior month, the fourth straight monthly decline amid a widespread cooling of the Canadian housing market.

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The Canadian Real Estate Association, which represents Canadian real-estate agents, said sales fell 2.1% in July from June. Sales decreased in about two-thirds of all local markets tracked, led by the greater Toronto area.

On a year-over-year basis, resale activity in July fell 11.9%.

The association said a closely watched gauge suggested Canada's housing market remained in balanced territory with the national sales-to-new listings ratio standing at 53.5% in July. A sales-to-new listings ratio above 60% indicates a sellers' market, the industry group noted.

Overall sales in Canada's housing market are down roughly 15% since April when the province of Ontario introduced measures to end speculative real-estate activity in Toronto and the surrounding area, CREA said.

Alongside those measures, which included a tax on foreign buyers of residential real estate, the Bank of Canada raised its benchmark interest rate by a quarter-percentage point to 0.75% in June. The central bank signaled that further rate increases are likely in the coming months.

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Still, the monthly decline represented the smallest drop in southern Ontario since the province's new measures were introduced in the market, said Gregory Klump, CREA's chief economist.

"This suggests sales may be starting to bottom out amid stabilizing housing market sentiment. Time will tell whether that's indeed the case once the transitory boost by buyers with preapproved mortgages fades," he said.

The real-estate association said the national average price for homes sold in July was 478,696 Canadian dollars (US$376,255), down 0.3% from one year earlier. Prices continue to be buoyed by the country's most active and expensive housing markets of Vancouver, British Columbia, and Toronto. Excluding those two markets reduces the average price by almost C$100,000, CREA said.

Write to David George-Cosh at david.george-cosh@wsj.com

(END) Dow Jones Newswires

August 15, 2017 11:03 ET (15:03 GMT)