TORONTO (Reuters) - Sales of existing homes in Canada rose to the highest level in more than five years in May, the fourth consecutive month of gains, the Canadian Real Estate Association said on Monday.
The industry group for Canadian real estate agents said sales were up 3.1 percent from April. Actual sales for May, not seasonally adjusted, were up 2.7 percent from May 2014.
CREA's home price index rose 5.17 percent from May 2014.
Vancouver and Toronto continued to set the pace with year-over-year price increases of 9.4 percent and 8.9 percent, respectively, while gains in the oil-industry capital of Calgary eked out a year-over-year increase of 1.2 percent, CREA said.
While analysts have long expected Canada's housing boom to slow, a drop in mortgage rates early this year has supported continued demand except in Calgary, where a huge drop in oil prices since last year has hurt the economy.
"Sales in and around the Greater Toronto Area played a starring role in the monthly increase in May sales," said Gregory Klump, chief economist at CREA.
"At the same time, the rebound in sales over the past few months in Calgary and Edmonton suggests that heightened uncertainty among some home buyers in these housing markets may be easing."
The national sales-to-new listings ratio was 57.6 percent in May, up from a low of 50.4 per cent in January. A ratio between 40 and 60 percent is considered balanced territory, and CREA noted that a third of local markets were above the 60 percent threshold in May, mostly those around Toronto and Vancouver.
Fears of an overheated Canadian housing market prompted the government to tighten mortgage lending limits in recent years, and most markets have cooled from a 2014 peak. But Toronto and Vancouver continue to see rising sales and prices.
CREA said the number of months of inventory rose to 5.6 months, the lowest reading in three years, suggesting sellers have more negotiating power than they did a few months ago.
The national average price for homes sold in May 2015 was
C$450,886 ($365,771), up 8.1 percent year-over-year, the report showed.
Reporting by Andrea Hopkins; Editing by Chizu Nomiyama; and Peter Galloway