Canada’s existing home sales rise for fourth straight month in November

Existing home sales in Canada rose for the fourth consecutive month in November. Existing home sales were up 3.9 percent sequentially, bringing the metric to just 6 percent below the frenzied rate reached in March 2017.

Two-thirds of the rise in sales was mainly due to a sharp increase in the GTA, where sales dropped almost 50 percent in four months before rebounded over half of that dropped in the subsequent four months. Other markets in Ontario have also recorded rises in the month.

New listings were up 3.5 percent to the highest level since April 2010. The rise was driven by the strength in Ontario and B.C. with Newfoundland & Labrador also recording a rise. The remainder of provinces saw pull-back in listings on the month. The rise in sales and listings kept the ratio greatly unchanged at 56.4 percent. Most markets tightened. The average home price rose for the fourth straight month, rising 0.7 percent in November.

On a year-on-year basis, the quality-adjusted MLS home price index dropped to 9.3 percent from 9.7 percent as price growth weakened several markets in Ontario while also moderating in commodity-dependent markets.

A continuation of the soft-landing narrative is expected that has characterized the dynamics in the Canadian housing market.

“Higher mortgages, amid continued Bank of Canada interest rate hikes, will be a significant headwind on Canadian housing activity in 2018. However, still-solid employment and income growth should cushion the blow”, stated TD Economics.

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