Toronto lifts Canadian homes sales, Vancouver drags

Tue May 15, 2012 12:33pm EDT
 
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By Claire Sibonney

TORONTO (Reuters) - Canadian existing home sales jumped 11.5 percent in April from a year earlier, boosted by a hot Toronto market, but modest price gains nationally and sluggish activity in Vancouver suggest the country's housing boom may be cooling.

The latest data showed a growing divergence between Toronto and Vancouver, which have both seen bidding wars and foreign investment spur a post-recession property boom.

The Canadian Real Estate Association (CREA) said on Tuesday that 49,480 homes changed hands across the country last month, up from 44,370 a year earlier.

The industry group for real estate agents noted year-before sales were hurt by Finance Minister Jim Flaherty's 2011 decision to tighten access to government-insured mortgages. That change was aimed at taming a red-hot housing market and a surge in household debt levels, both of which have alarmed policymakers.

A TALE OF TWO CITIES

The latest data showed sharp regional differences. Sales fell 13.2 percent in Vancouver, by far Canada's most expensive property market, but jumped 14.5 percent in Toronto, where a boom in condo development has raised bubble fears.

The national average home price rose just 0.9 percent year-over-year on a non-seasonally adjusted basis to hit C$375,810 ($375,810).

CREA noted that the divergent fortunes of Toronto and Vancouver again had a huge influence on the numbers, with the national average price skewed higher in the spring of 2011 by record high-end home sales in Vancouver's priciest neighborhoods.   Continued...