TORONTO (Reuters) - Sales of existing homes in Canada fell in July from June, the second consecutive monthly decline, as strength in the two big markets of Vancouver and Toronto could not offset weakness elsewhere, the Canadian Real Estate Association said on Friday.
CREA, the industry group for real estate agents, said sales were down 0.4 percent last month from June. Not seasonally adjusted, they were up 3.4 percent from July 2014.
“The big picture remains little changed in Canada’s housing market, with strong gains in Vancouver and Toronto contrasting with much softer or more balanced markets across pretty well the rest of the country,” BMO Capital Markets senior economist Robert Kavcic said in a research note.
CREA Chief Economist Gregory Klump noted that the strength in Toronto and Vancouver has spread to nearby markets in their respective provinces of Ontario and British Columbia, with those two provinces accounting for about 60 percent of national sales.
“These remain the only places in Canada where home prices are growing strongly,” Klump said in the report.
Low interest rates have kept the housing market stronger than expected despite signs of a slowdown in some markets, including Canada’s oil-industry capital of Calgary, where the plunge in crude prices has hurt the economy,
The national sales-to-new-listings ratio was 56.8 percent in July, down slightly from 57.1 percent in June. A ratio between 40 percent and 60 percent is generally consistent with a balanced market, CREA said.
There were 5.6 months of inventory at the end of July, unchanged from the previous two months. That measure is at a three-year low as Canada’s prolonged housing boom has drawn down overall supply.
CREA’s home price index, considered a better gauge of home prices than an average home price, rose 5.9 percent from July 2014, and price gains continued to be led by Vancouver, where prices were up 11.23 percent from a year earlier, and by Toronto, where they were up 9.39 percent. Calgary prices were up just 0.1 percent.
The national average home price in July was C$437,699 ($335,504), up 8.9 percent year-over-year. The national average is upwardly distorted by hot sales activity in Toronto and Vancouver, where prices are much higher than in other cities. Excluding Toronto and Vancouver, the average price is a more modest C$341,438 and the year-over-year gain is reduced to 4.1 percent.
Reporting by Andrea Hopkins; Editing by Peter Galloway