Canadian home sales rise again in July: CREA

Fri Aug 15, 2014 10:58am EDT
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By Andrea Hopkins

TORONTO (Reuters) - Sales of existing homes in Canada rose in July to their highest level since March 2010, notching their sixth straight monthly increase after a slow winter, the Canadian Real Estate Association (CREA) said on Friday.

CREA, the industry group for real estate agents, said sales were up 0.8 percent last month from June, surpassing June's downwardly revised 0.6 percent increase. Actual sales for July, not seasonally adjusted, were up 7.2 percent from July 2013.

Canada's housing market has roared back to life after an especially brutal winter that hurt home-building, sales and prices. The bounce-back has been bolstered by low mortgage rates, which are not expected to rise significantly until 2015.

"The (recent decline in mortgage rates) will prove to be the more important determinant over the rest of the year," Mazen Issa, senior Canada macro strategist at TD Securities, said in a research note.

"While we do expect that higher rates will curtail housing market activity, the magnitude remains small," he added.

"The true catalyst will be the next stage of the policy normalization process by the Bank of Canada, which we do not expect will happen until the second half of 2015," Issa said.

CREA's home price index rose 5.3 percent from July 2013, little changed from June's 5.4 percent gain. The national average price for homes sold in July, not seasonally adjusted, was C$401,585 (approximately $368,000), up 5 percent from the same month last year.

"Low mortgage interest rates continue to bolster home sales activity," Gregory Klump, CREA's chief economist, said in a statement.   Continued...

A man works on a new construction home in Kitimat, in northwestern British Columbia on April 13, 2014. 
REUTERS/Julie Gordon