TORONTO (Reuters) - Sales of existing homes in Canada slumped in December, led by declines in Calgary and Edmonton, as tumbling oil prices hurt home buyer demand in the resource-dependent region of the country, the Canadian Real Estate Association (CREA) said on Thursday,
The industry group for Canadian real estate agents said sales were down 5.8 percent last month from November. Actual sales for December, which are not seasonally adjusted, were up 7.9 percent from December 2013.
CREA’s home price index rose 5.4 percent from December 2013.
“Given the uncertain outlook for oil prices, it’s no surprise consumer confidence in Alberta softened and moved some home buyers to the sidelines,” CREA Chief Economist Gregory Klump said in the report.
“With regards to slower activity in Calgary and Edmonton, sales in these two markets had been running strong all year before they returned to levels that are entirely average for the month of December,” he added.
Canada’s housing market has roared ahead for more than five years, but analysts have repeatedly said they expect sales and homebuilding to slow as interest rates rise in 2015. While some have said the market will crash like the U.S. market did in 2008, most predict a more gradual “soft landing.”
The national sales-to-new listings ratio was 51.8 percent in December, down from the mid-55 percent range in the previous four months, CREA noted.
There were 6.2 months of inventory nationally at the end of December 2014, up from 5.8 months in November, CREA said.
“Together with the softer reading for the sales-to-new listings ratio, this suggests that the Canadian housing market has become more balanced,” the agency said.
Reporting by Andrea Hopkins; Editing by Bernadette Baum and Jeffrey Benkoe