WRAPUP 1-Canadian home sales, prices make further gains in Sept

Tue Oct 15, 2013 11:21am EDT
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* Sales of existing homes up 0.8 pct in Sept-CREA

* CREA home price index up 3.1 pct from year ago

* Teranet housing price index flat in Sept

By Leah Schnurr

TORONTO, Oct 15 (Reuters) - Sales of existing homes in Canada jumped in September from a year ago and prices rose, though analysts cautioned the gains came partly on the back of depressed activity in 2012 that followed tighter mortgage rules.

Still, compared to August, sales in September edged up 0.8 percent, the Canadian Real Estate Association (CREA) said on Tuesday, suggesting Canada's resilient housing market is still attracting buyers.

The housing sector has been a major driver of Canadian economic growth coming out of the recession, but the market has been plagued by worries it has over-extended itself and is due for a correction.

Concerned about high levels of household debt, the government tightened mortgage lending rules four times since the financial crisis. After the latest intervention, in July 2012, the property market cooled markedly. But the market bounced back this spring, with many buyers making purchases ahead of an expected increase in borrowing costs.

Last year's lower levels pushed September's actual sales activity up 18.2 percent compared to September 2012 on a non-adjusted basis.   Continued...