Tags: Canada | home | sales | economy

Canadian Home Sales Reach Highest in More Than 4 Years in August

Monday, 15 Sep 2014 11:01 AM

Canadian existing home sales rose to the highest in more than four years last month led by gains in Vancouver and Toronto, markets policy makers have said are most vulnerable to becoming over-extended.

August’s 1.8 percent rise to 42,295 units was the seventh monthly increase in a row, the Canadian Real Estate Association said in a statement Monday from Ottawa. Vancouver sales rose 8.0 percent to 2,967 units after adjusting for seasonal variations, and Toronto sales climbed 2.1 percent to 8,259 in August.

The group boosted its 2014 forecast to 475,000 units from a June prediction of 463,400, citing a burst of activity fueled by a drop in mortgage rates after a “bleak” winter. Monday’s report meshes with other signs that Vancouver and Toronto remain hot markets as the Bank of Canada signals concern that some households may become overextended.

“The boost from deferred sales is still expected to prove transitory,” Gregory Klump, CREA’s chief economist, said in the report. “That said, low interest rates will continue to support housing affordability and sales activity.”

From a year earlier, sales gained 2.1 percent, the Ottawa- based group said. The average resale price rose 5.3 percent to C$398,618 ($360,100).

Recent gains in residential building permits, home starts and prices led the Bank of Canada on Sept. 3 to amend language about “imbalances” in household finances, saying that those risks remain.

Low Rates

Canada’s ratio of household debt to disposable income rose to 163.6 percent between April and June, close to the record 164.1 percent in the third quarter of last year, Statistics Canada said Sept. 12.

Low mortgage rates are boosting the housing market, with the average five-year fixed rate at 4.79 percent last week.

“Amid low mortgage rates, this report suggests that the renewed focus on all things housing is warranted,” said David Tulk, chief Canada macro strategist at Toronto-Dominion Bank’s TD Securities unit.

Home sales will decline 0.4 percent to 473,100 units next year and the average price will rise 0.7 percent to C$407,900, according to CREA’s updated forecast Monday. In June, the real estate group said sales would rise 0.9 percent to 467,800 units in 2015 and the average price would be C$407,300.

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Canadian existing home sales rose to the highest in more than four years last month led by gains in Vancouver and Toronto, markets policy makers have said are most vulnerable to becoming over-extended.
Canada, home, sales, economy
364
2014-01-15
Monday, 15 Sep 2014 11:01 AM
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