Canadian home sales fall in March

Canada’s home sales were lower in March, but prices rose 11.2% from the same month a year earlier, the Canadian Real Estate Association (CREA) said Tuesday.

Sales were down 16.3% from a year ago when they hit an all-time high, ACI said. On a monthly basis, seasonally adjusted home sales declined 5.4% in March.

According to TD Bank economist Rishi Sondhi, some of the March decline likely reflected, to some extent, buyer fatigue after several months of robust activity, as buyers ramped up purchases ahead of the rate hike.

The Bank of Canada raised its target rate by a quarter of a percentage point in early March and by half a percentage point last week. These decisions pushed the banks’ prime interest rates up as they use the central bank’s policy rate as a benchmark in setting variable mortgage rates.

The yields on five-year fixed-rate mortgages have also risen in recent weeks, as have the yields on five-year government bonds issued by the Canadian government.

“And with the Bank of Canada poised to aggressively raise interest rates, home sales are expected to fall further in the future,” Sondhi wrote in a report. “This should help balance the market and weigh on house price growth. Indeed, our forecasts point to a significant slowdown in average house price growth in the second half of the year. †

The decrease in the number of transactions was due to the fact that the number of new advertisements for sale fell by 5.5% on a monthly basis in March. The national price of homes sold in March reached $796,068, down from $715,696 in the same month in 2021. Excluding the greater areas of Vancouver and Toronto, two of the most popular and pricey real estate markets, the national average price was in place last month. of that around $ 633,000 .

Royal LePage revises forecast upwards

In a separate study released Tuesday, real estate agency Royal LePage reported that total real estate prices nationwide rose 25.1% year-on-year to $856,900 in the first quarter. This is the highest-ever first-quarter profit since the company studied these prices.

Phil Soper, CEO of Royal LePage, said the real estate company expects a strong first half of 2022, followed by moderation in real estate markets.

“However, the first quarter of the year was so strong that we had to raise our expectations for 2022,” Soper said in a statement. “In addition, house prices will continue to rise in the coming months due to the ongoing imbalance between insufficient supply and strong demand. †

Royal LePage now forecasts that the total price of a property in Canada will increase by 15% in the fourth quarter compared to the same quarter in 2021. In the earlier forecast, the indicated growth was 10.5%.

Decline in housing starts

Separately, the Canada Mortgage and Housing Corporation (CMHC) reported Tuesday that the seasonally adjusted, annualized number of homes rose to 246,243 units in March, from 250,246 in February.

In urban centers, the number of home starts fell by 2% in March to 220,708. In the segment of apartments, condominiums and other types of multi-family homes, the number of homes decreased by 5% to 154,876, while that of single-family homes increased by 8% to 65 832.

Rural housing was estimated at a seasonally adjusted annual rate of 25,535.

The six-month moving average for seasonally adjusted, annualized home starts was 252,497 in March, up from 253,296 in February.

To be seen in video

Leave a Comment