Canadian existing home sales rise sequentially in August

Canada’s existing home sales grew sequentially in August, rising for the fourth consecutive month. Existing home sales rose 0.9 percent. The increase builds on July’s upwardly revised 3 percent gain. Sales were higher in around half of all local markets in August, with strong gains in Toronto, Montreal and Edmonton. Meanwhile, sales fell in Halifax, London and Winnipeg.

Activity rose in many markets in B.C. For example, sales rose 2.9 percent in Vancouver – the first gains in 2018. Gains were recorded in Fraser Valley, Okanagan-Mainline and Victoria. New listings remained the same in August, as gains in the GVA and Montreal were countered by falls in the GTA and Winnipeg.

With new listings unchanged and sales rising, the sales-to-new listings ratio rose to 56.6 in August – in line with a balanced market, although up from a low of 51.2 in May and coming closer to seller’s market territory. Provincially, the ratio was highest in New Brunswick, after by Quebec and PEI. On the contrary, the ratio was lowest in Saskatchewan, Alberta and Newfoundland and Labrador – indicating loose conditions in these markets. In Ontario, the ratio rose to 61.5, its highest level since January. The ratio also increased to 52.5 in B.C.

The average home price rose for the fifth straight month in August. It was also 1 percent up year-on-year, a rebound from the 0.6 percent year-on-year gain seen in July. The quality-adjusted MLS home price index rose 2.5 percent year-on-year, marking an acceleration from July’s 2.2 percent gain. Quality-adjusted prices rose in most markets. The Prairies were the exception, with markets in Saskatchewan and Alberta dealing with oversupplied conditions.

Price growth continued to be strong in Ottawa and Montreal, lifted by tight market conditions. Prices were higher in the GTA – marking the first such gain since February. In the GVA, price growth slowed to the weakest rate since 2014.

“From the standpoint of overall economic growth, rising resale activity should ensure that residential investment adds to third quarter GDP after subtracting, on average, in the prior two quarters”, stated TD Economics.

At 15:00 GMT the FxWirePro's Hourly Strength Index of Canadian Dollar was highly bearish at -123.339, while the FxWirePro's Hourly Strength Index of US Dollar was neutral at -27.0358. For more details on FxWirePro's Currency Strength Index, visit http://www.fxwirepro.com/currencyindex