UPDATE 1-Canada home sales up but may have peaked in key cities-CREA

Mon May 16, 2016 10:22am EDT
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(Adds regional data, CREA comment)

By Andrea Hopkins

TORONTO May 16 (Reuters) - Sales of existing homes in Canada rose in April from March, even as activity in the two largest markets, Toronto and Vancouver, appears to have peaked, a report from the Canadian Real Estate Association showed on Monday.

The industry group for Canadian real estate agents said sales were up 3.1 percent last month from March. Actual sales for April, not seasonally adjusted, were up 10.3 percent from April 2015.

Canada's housing market has boomed since 2009, driven mostly by tight supply in Toronto and Vancouver. While some markets have cooled, annual price gains continue to hit double-digits on a national basis, well above the rate of inflation, and concern about a possible housing bubble remains.

"National home sales set new monthly records over the past two months, even as activity in Greater Vancouver and the GTA (Greater Toronto Area) appears to have topped out," CREA President Cliff Iverson said in the report.

Overall sales were tempered by what CREA called a "self-reinforcing" supply shortage in Toronto, Canada's largest city, where prices have become unaffordable for many. Vancouver is heading in that direction too, CREA said.

"While significant home price gains may entice some homeowners in these markets to list their home for sale, the issue for many is that the decision to move means they would also be looking to buy while competition for scarce listings is fierce," Gregory Klum, CREA's chief economist, said in a statement.

"As a result, many homeowners are deciding to stay put and continue accumulating capital gains."   Continued...