Canada November home sales fall, forecast cut for 2013

Mon Dec 17, 2012 10:50am EST
 
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By Andrea Hopkins

TORONTO (Reuters) - Sales of existing homes in Canada fell in November from October and year-over-year sales were down as well, the Canadian Real Estate Association said on Monday as it once again trimmed forecasts for resale housing in 2012 and 2013.

The industry group for Canadian real estate agents said sales activity was down a seasonally adjusted 1.7 percent in November from October. Actual sales for November, not seasonally adjusted, were down 11.9 percent from a year earlier.

The drop continues a slowing trend that began when tighter mortgage rules came into effect in July, and CREA said it now believes national resale housing activity will slow 0.5 percent in 2012 and recede by 2 percent in 2013.

The group had said in September it expected housing to rise 1.9 percent this year and decline 1.9 percent in 2013. In June, CREA forecast a 3.8 percent jump this year.

CREA Chief Economist Gregory Klump said 2012 sales were strong prior to a move by the federal government to tighten mortgage lending rules, and are now weaker.

"By contrast, forecast sales in 2013 reflect an improvement from levels this summer in the immediate wake of mortgage rule changes. Even so, sales in most provinces next year are expected to remain down from levels posted prior to the most recent changes to mortgage regulations," said Klump.

POST-CRISIS BOOM FADES

Canada's housing market avoided a meltdown in the wake of the financial crisis in 2009, with conservative lending standards given most credit for the market's resilience. Ultra-low interest rates then helped fuel a post-crisis boom.   Continued...

 
A sold sign is displayed in front of a home in Toronto December 15, 2009. REUTERS/Mike Cassese