Canadian home sales jump in April but fall from year-ago level

Thu May 15, 2014 10:22am EDT
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By Andrea Hopkins

TORONTO (Reuters) - Sales of existing homes in Canada jumped in April from March as the spring market roared to life, though they fell from year-ago levels, the Canadian Real Estate Association said on Thursday.

The industry group said sales were up 2.7 percent last month from March, the third straight month of gains after a particularly brutal winter that kept buyers out of the market.

Sales for April, not seasonally adjusted, were down 0.3 percent from April 2013, and the level of sales is still well below the peak set last August, when home buyers rushed into the market in anticipation of higher interest rates.

Canada's housing market has risen strongly, if unsteadily, in the past five years, and economists have been waiting for the spring data to gauge whether it is cooling or heating up again.

So far, the rebound has raised expectations for steady demand through the summer, but economists believe the market will soften later in 2014 and into 2015, when many see the Bank of Canada raising interest rates.

"It is anticipated that the housing market will stage a relatively modest rebound through the long-awaited spring and into the summer," David Tulk, chief Canada macro strategist at TD Securities, said in a note.

"We would note that this move should be the last push higher as interest rates are anticipated to gradually increase from here," he added.

CREA's home price index rose 5.0 percent from April 2013, a slight slowdown from March's 5.2 percent gain and the first deceleration in year-over-year price growth since April 2013.   Continued...