April 15, 2015 / 1:18 PM / in 3 years

Canadian existing home sales rise in March: CREA

TORONTO (Reuters) - Sales of existing homes in Canada rose in March from February, led by gains in the big Toronto and Vancouver markets, the Canadian Real Estate Association (CREA) said on Wednesday.

A home for sale is seen in Toronto, March 11, 2014. REUTERS/Aaron Harris

The industry group for Canadian real estate agents said sales were up 4.1 percent last month from February. Actual sales for March, not seasonally adjusted, were up 9.5 percent from March 2014.

The spring rebound was hottest in Toronto and Vancouver, though sales were up in two-thirds of the markets surveyed, including Canada’s oil industry capital, Calgary, where sales had slowed in recent months as oil prices plummeted.

“Greater Vancouver and the GTA (Greater Toronto Area) are really the only two hot spots for home sales and prices in Canada,” CREA chief economist Gregory Klump said in the report.

“Price gains in these two markets are being fueled by a shortage of single family homes for sale in the face of strong demand.”

CREA’s home price index rose 4.95 percent from March 2014.

Analysts have long expected Canada’s prolonged housing boom to slow, but low Bank of Canada interest rates, international investment and lack of supply in Toronto and Vancouver have kept the market bubbling.

“The bank’s surprise rate cut back in January was an insurance policy against the impact that lower oil prices would have on the economy,” David Tulk, chief Canada macro strategist at TD Securities, said in a research note. “As the housing market data has shown, a rates-driven rebound helps to alleviate the regional drag in commodity producing regions.”

The number of newly listed homes rose 1.8 percent in March from February as a rebound in Toronto more than offset a continuing pullback of new supply in Calgary.

The national sales to new listings ratio rose to 53.9 percent in March from 52.7 percent in February, still within the 40- to 60-percent range considered balanced.

There were 6.1 months of inventory in March, down from 6.3 months in February, indicating a slightly tighter market.

The national average price for homes sold in March 2015, not seasonally adjusted, was C$439,144 ($350,195), up 9.4 percent

on a year-over-year basis. But the gain is being increasingly skewed by the expensive Vancouver and Toronto markets. When those two cities are excluded, the year-over-year price gain shrinks to just 2.4 percent, CREA said.

($1=$1.254 Canadian)

Editing by Chizu Nomiyama; and Peter Galloway

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