Canada’s home sales rise in March, housing markets to remain under pressure

Canada’s home sales rose in March, ending a two month streak if sharp declines. Sales rose 1.3 percent in the month. The rise was underpinned by a solid recovery in markets such as Montreal and Ottawa. Meanwhile, home sales in the GVA dropped sharply while GTA activity was slightly changed after revisions to previous months.

New listings also rose a bit by 3.3 percent sequentially, greatly following the trends in activity. The larger rise in listings has left the sales-to-listings ratio slightly lower at 53. Most provinces saw drops, with central Canada bucking the trend. The ratio in Saskatchewan and Newfoundland & Labrador has dropped to a decade and two-decade lows, respectively.

The lower sales-to-listings ratio, and the falling share of activity in the most expensive and GTA markets has led the average home price lower by 1.9 percent in March – the third straight fall. Abstaining from changes in composition, the HPI rose slightly in March, and rose slightly by 4.6 percent, its slowest rate in almost five years.

Canada’s housing markets are expected to stay under-pressure from the recent B-20 regulation, higher mortgage rates, and in some cases provincial regulation, noted TD Economics.

“However, lower-priced markets where affordability is good should generally outperform in the current environment”, added TD Economics.

At 18:00 GMT the FxWirePro's Hourly Strength Index of Canadian Dollar was neutral at 42.6886, while the FxWirePro's Hourly Strength Index of US Dollar was neutral at 42.2873. For more details on FxWirePro's Currency Strength Index, visit http://www.fxwirepro.com/currencyindex

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