OTTAWA (Reuters) - Canadian home prices and sales rose in March, showing the country’s housing market boom still had momentum even as separate factory data suggested an increase in economic growth at the beginning of the year may not be sustainable.
Canadian manufacturing sales tumbled far more than expected in February, data from Statistics Canada showed on Friday, retreating from recent gains and dampening expectations for growth in the month.
Sales fell 3.3 percent, outstripping economists’ forecasts of a decline of 1.5 percent and breaking a three-month run of gains. Volumes fell 2 percent.
Sales were down in 16 out of 21 sectors, with motor vehicle and petroleum and coal product sales accounting for more than two-thirds of the decrease.
Analysts said the figures do not bode well for February gross domestic product after January’s surprisingly strong growth.
The numbers were “consistent with what we anticipate will be a streak of weaker economic data consistent with the global headwinds that will continue to restrain the Canadian economy,” wrote David Tulk, head of global macro strategy at TD Securities.
Still, he sees the first quarter GDP growing at a relatively strong pace of 2.9 percent. Canada was briefly in recession last year and is still struggling to regain momentum as it grapples with cheap oil prices.
The housing market, a pillar of economic strength in the years since the financial crisis, was more rosy, with existing-home sales up 1.5 percent in March.
Sales reached a monthly record of 45,137 units, the Canadian Real Estate Association (CREA) said. Sales in the hot markets of Vancouver and Toronto edged down, but they remained near records attained the month before.
CREA‘S home price measure rose 9.1 percent from the year before, making for the largest increase since June 2010.
The increase was mirrored in another release that showed the Vancouver market continued to buoy prices. Teranet-National Bank Composite House Price Index showed national home prices rose 0.8 percent last month and 7 percent from a year earlier.
Prices have become more varied lately, with price gains continuing in the hot markets of Toronto and Vancouver, the energy-sensitive regions slowing and the rest of the country plodding along.
Additional reporting by Ethan Lou in Toronto; Editing by Steve Orlofsky