Canada home sales drop in August, forecasts cut
By Andrea Hopkins
TORONTO (Reuters) - Canadian existing home sales suffered their biggest month-over-month decline in more than two years in August, a sign that recent government mortgage rule changes may be hastening the end of the country's post-recession property boom.
The data released on Monday by the Canadian Real Estate Association (CREA) prompted the industry group to cut its sales and price forecasts for this year and next.
"August's sales figures will no doubt provide comfort to policymakers, providing the first clear indication that the recent changes to mortgage regulations aimed at cooling the market are working as intended," Gregory Klump, CREA's chief economist, said in a statement.
CREA said the decline in sales in August was "definitely the result of much of the country moving in the same direction."
Mindful of the U.S. housing market crash that triggered the global financial crisis, Finance Minister Jim Flaherty in June tightened rules on government-backed mortgages for the fourth time in four years. The changes took effect July 9. <ID: nL1E8HLAPP>
The latest CREA data showed sales were down 5.8 percent in August from July. Actual sales for August, not seasonally adjusted, were down 8.9 percent from a year earlier.
The national average price for homes sold in August, also not seasonally adjusted, was C$350,192 ($360,400), up just 0.3 percent from the same month last year.
FORECASTS FALLING Continued...