Canada’s existing home sales rise sequentially in October

Canada’s existing home sales grew in October on sequential basis, marking the third straight rise. Sales were up 0.9 percent. Still, existing home sales continue to be around 11 percent below their overheated rate seen in March 2017. The rise was greatly linked to a continuing recovery in Ontario and the GTA which have both recorded their third straight monthly rises. New Brunswick, Saskatchewan and Quebec also recorded a rise in activity while sales in Newfoundland & Labrador continued to be unchanged. The remainder of provinces recorded declines in activity led by P.E.I. Nova Scotia.

Increasing sales dwarfed new listings nationally, raising the sales to new listings ratio by one point to 56.7 percent, which is still within the balanced territory but slightly favoring sellers.

The average home price increased for the third straight month, increasing 1.7 percent in October. Despite the rise, the average transaction price continues to be slightly 5 percent below the April 2017 peak. All provinces except Newfoundland and Labrador and Saskatchewan recorded rise in prices.

On a year-on-year basis, the quality adjusted MLS home price index slowed to 9.7 percent from 10.5 percent as several Ontario markets continued to ease and commodity-dependent markets lagged.

“All in all, we expect a continuation of the soft-landing narrative that's been playing out across most Canadian markets. After raising rates twice over the summer, the Bank of Canada is expected to hike in January, with rising interest rates likely to impinge on Canadian housing activity”, noted TD Economics.

Activity is expected to further be affected by the imposition of the updated B-20 rules from OSFI. After some near-time weakness, which is expected to last into mid-2018, activity might start to recover owing to fundamental demand related to sound labor market and firming wage dynamics, added TD Economics.

At 19:00 GMT the FxWirePro's Hourly Strength Index of Canadian Dollar was bearish at -77.2614, while the FxWirePro's Hourly Strength Index of US Dollar was slightly bearish at -64.5986. For more details on FxWirePro's Currency Strength Index, visit http://www.fxwirepro.com/currencyindex

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