September 15, 2015 / 1:26 PM / 2 years ago

Canada existing home sales rose in August, buoyed by major cities

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A home for sale is seen in Toronto, March 11, 2014.Aaron Harris

TORONTO (Reuters) - Sales of existing homes in Canada rose in August from July, as strength in the two big markets of Vancouver and Toronto offset weakness elsewhere, a report from the Canadian Real Estate Association released on Tuesday showed.

The industry group for Canadian real estate agents said sales activity was up 0.3 percent last month from July. Actual sales for August, not seasonally adjusted, rose 4 percent from August 2014.

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.

In a separate report, CREA said it had revised up its quarterly forecast for national sales and average prices, despite the oil shock, saying stronger-than-expected sales and price gains in British Columbia and Ontario will buoy the overall numbers.

CREA forecast sales to rise 3.3 percent to 495,800 units in 2015, which would be the second highest year on record. It projected national average home prices to rise 6.2 percent in 2015 to C$433,600 in 2015.

It has previously forecast a 1.3 percent rise in sales to 487,200 units and a 5.2 percent price gain to C$429,400.

In 2016, national sales are forecast to flatten at 495,000, while the national average price is forecast to edge higher by 2 percent to C$442,400.

The August report showed the national sales-to-new-listings ratio was 56.7 percent last month, down slightly from 56.9 percent in July. 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 August, unchanged from the previous three 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 6.43 percent from August 2014, and price gains continued to be led by Vancouver, where prices were up 11.96 percent from a year earlier, and by Toronto, where they were up 9.99 percent. Calgary prices were flat from a year earlier.

The national average home price in August was C$433,367 ($326,675), up 8.7 percent year-over-year. Excluding Toronto and Vancouver, the average price is a more modest C$338,755 and the year-on-year gain is 4.2 percent.

($1 = 1.33 Canadian dollars)

Reporting by Andrea Hopkins; Editing by Chizu Nomiyama and Alan Crosby

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