Canadian home sales jumped 22.7% in December

Canadian home sales rose 22.7% in December from the same month a year earlier, and prices have risen as part of a trend that is expected to continue this year, the Canadian Association said on Wednesday. of the building (ACI).

January 16, 2020

Sales in the last month of 2019 increased in one year in a majority of regions of Canada compared to last year, when growth had slowed, the association said.

Compared with November, home sales fell 0.9% in December. The decline ended a series of monthly increases that began in March.

Sales listings declined in December, which put upward pressure on prices. The real national average price of a home sold in December 2019 was around $ 517,000, up 9.6% from the same month a year earlier.

Excluding the major areas of Vancouver and Toronto, two of the most expensive and most active housing markets in the country, the average price of a house sold was around $ 400,000, up 6.7 % compared to December 2018.

The average price rose 11.3% in Ontario and 8.5% in British Columbia, while it fell 0.4% in Alberta and 3.7% in Saskatchewan. In Quebec, the average price rose 7.3%.

"The growth in property prices is being felt in markets where there is a supply shortage," said ACI President Jason Stephen.

New listings for sale fell 1.8% in December from the previous month, placing them near their lowest level in a decade, the association said.

This trend pushed the national sales to new listings ratio to 66.9%, its highest level since spring 2004, and well above the long-term average of 53.7%.

The overall increase in activity from a year earlier has boosted the economy, said Bank of Montreal chief economist Douglas Porter.

"After a few difficult years, the Canadian housing market has recovered - having been a drag on growth, it has become a source of strength."

Porter added that further price hikes expected this year would also put upward pressure on household debt and limit the Bank of Canada's flexibility to change interest rates.

"The widespread rebound in home sales, prices and borrowing is one of the main reasons the Bank of Canada has lagged behind and why we expect it to stay there in 2020."

TD Bank economist Rishi Sondhi noted that the weakest activity at the end of the year, after month-to-month declines in December, was largely due to the downward trend in the offer, which should continue this year.

"While the job market has weakened and interest rates are rising from their September lows, a key factor in moderating activity is, in our opinion, the sluggish growth in available stocks. "

Despite some supply constraints, sales are expected to increase this year, he said.

"For 2020, we anticipate increased sales, fueled by a likely decline in Bank of Canada rates, new job gains, strong population growth and favorable federal policies. Prices should also register strong growth given the tightening of conditions. ”

Fonte: La Presse canadienne

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