Vancouver cushions Canada Feb home resales fall

Tue Mar 15, 2011 1:27pm EDT
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By Ka Yan Ng

TORONTO (Reuters) - Canadian home resales dropped in February but a show of strength in the Vancouver market cushioned the fall, data from the Canadian Real Estate Association (CREA) showed on Tuesday.

Overall, 38,699 homes changed hands in February, down 1.6 percent from January, while the national average price jumped 8.8 percent year-over-year to C$365,192 ($368,881).

But because of the strength in the heavily weighted Vancouver area -- where the average home price, at C$790,380, was more than double the national average -- national sales did not fall as much as they could have.

"Note the extent to which Vancouver dominates these figures...the city absolutely stands alone," said Doug Porter, deputy chief economist at BMO Capital Markets.

"Suffice it to say that any real concerns about a Canadian housing bubble are highly concentrated in geographic terms," he added, calling the February home sales data a "one-city wonder".

Sales fell from January in almost two-thirds of the markets surveyed, compared with a 7 percent jump in Vancouver, the CREA data showed. The industry group also cautioned that the average price was distorted by a record number of multimillion-dollar home sales around the Greater Vancouver area.

"When you take Vancouver out of the equation, the year-over-year increase in the national average price drops to 3.4 percent," said Gregory Klump, CREA's chief economist.

"While that's still stronger than in the past six months or so, national average price gains may recede after tighter mortgage regulations take effect in March."   Continued...

<p>A real estate sign is seen on front of a house in Toronto June 19, 2009. REUTERS/Chris Roussakis</p>