Canada March home sales edge up from February, down on year

Mon Apr 15, 2013 11:43am EDT
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By Andrea Hopkins

TORONTO (Reuters) - Sales of existing homes in Canada rose in March from February even though year-over year sales fell sharply, data on Monday showed, offering more signs that the post-recession housing boom may have turned into a stable slowdown.

Prices were up 2.2 percent from a year earlier, the smallest increase in more than two years, the report from the Canadian Real Estate Association (CREA), the umbrella group for real estate agents, said.

Sales were up 2.4 percent in March from the month before. Actual sales for March, not seasonally adjusted, were down 15.3 percent from a year earlier, the report said.

The March month-on-month uptick in sales, after a 1.1 percent drop in February, and the modest rise in prices raised hopes Canada's housing market may be on track for a soft landing rather than a U.S.-style crash.

The market was sizzling a year ago, but has cooled sharply since the federal government tightened mortgage rules in July 2012 to prevent a U.S.-style real estate bubble. The changes shortened the maximum mortgage length, making it harder for Canadians to take on too much debt to get into the expensive real estate market.

It was the Conservative government's fourth such move in four years as it grew alarmed by record high household debt levels.

"Today's print helps to placate some of the concern that the housing market is in for a crash following an appreciable slowdown in sales and construction activity since the implementation of the fourth round of tighter mortgage regulations last summer," Mazen Issa, Canada macro strategist at TD Securities, said in a research note.

"We expect the theme of stabilization to take hold over the coming months to reflect shifting fundamentals."   Continued...

An apartment block is pictured in downtown Vancouver, British Columbia June 20, 2011. REUTERS/Jason Lee