Sales of existing homes in Canada fell 1.7% in April from the prior month, the Canadian Real Estate Association said Monday, as recent policy changes by the Ontario government appeared to have cooled market activity in several key major cities.
The industry group, which represents Canadian real-estate agents, said sales fell in nearly two-thirds of all markets, with Toronto leading the declines. Last month, Ontario authorities unveiled more than a dozen new measures aimed at cooling a frothy real-estate market in Canada's most populous province.
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Those steps came shortly after Bank of Canada Governor Stephen Poloz commented that Toronto's housing-market conditions, notably the city's "unsustainable" surge in home prices, represent a risk to Canada's financial system.
"Policy makers will no doubt continue to keep a close eye on the combined effect of federal and provincial measures aimed at cooling housing markets of particular concern, while avoiding further regulatory changes that risk producing collateral damage in communities where the housing market is well balanced or already favors buyers," CREA Chief Economist Gregory Klump said in a news release.
Still, the sales declines failed to curb price gains, with CREA reporting that the national average price for homes sold last month was up 10.4% from a year earlier, to 559,317 Canadian dollars (about $410,000). Prices continue to be lifted by the country's most active and expensive housing markets of Vancouver and Toronto. Excluding those two markets, the average price was reduced by more than C$150,000, CREA said.
Sales activity in Canada's two biggest markets tumbled in April with Vancouver sales down 26.2% and Toronto activity falling 3.8% from the previous month.
The number of newly listed homes rose 10% in April, led by an overwhelming 36% increase in Toronto. The national sales-to-new listings ratio fell to 60.1% in April from 67.3% in the previous month, CREA said. A sales-to-new listings ratio above 60% indicates a sellers' market, the industry group said.
Last week, Canada's Teranet-National Bank composite house-price index rose 1.2% in April from the previous month, reaching a new high for the 15th straight month. Home prices continued to be led by eight out of the 11 Canadian metro markets surveyed by the index amid strong gains in Toronto, Victoria, Halifax and Hamilton.
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(END) Dow Jones Newswires
May 15, 2017 11:04 ET (15:04 GMT)