TORONTO (Reuters) - Sales of existing homes in Canada rose in April from March, even as activity in the two largest markets, Toronto and Vancouver, appears to have peaked, a report from the Canadian Real Estate Association showed on Monday.
The industry group for Canadian real estate agents said sales were up 3.1 percent last month from March. Actual sales for April, not seasonally adjusted, were up 10.3 percent from April 2015.
Canada’s housing market has boomed since 2009, driven mostly by tight supply in Toronto and Vancouver. While some markets have cooled, annual price gains continue to hit double-digits on a national basis, well above the rate of inflation, and concern about a possible housing bubble remains.
“National home sales set new monthly records over the past two months, even as activity in Greater Vancouver and the GTA (Greater Toronto Area) appears to have topped out,” CREA President Cliff Iverson said in the report.
Overall sales were tempered by what CREA called a “self-reinforcing” supply shortage in Toronto, Canada’s largest city, where prices have become unaffordable for many. Vancouver is heading in that direction too, CREA said.
“While significant home price gains may entice some homeowners in these markets to list their home for sale, the issue for many is that the decision to move means they would also be looking to buy while competition for scarce listings is fierce,” Gregory Klum, CREA’s chief economist, said in a statement.
“As a result, many homeowners are deciding to stay put and continue accumulating capital gains.”
The national sales to new listings ratio rose to 64.5 percent in April, the ratio’s highest reading since October 2009. A ratio between 40 and 60 percent is considered balanced, and the reading above 60 percent indicates a seller’s market.
There were 4.7 months of inventory at the end of April, the lowest level in more than six years, reflecting increasingly tight markets in Ontario and British Columbia, the report said.
The actual national average price for homes sold in April was C$508,097 ($394,271), up 13.1 percent on a year-over-year basis. CREA’s home price index, considered a better gauge of price trends because it corrects for the high prices in the disproportionately large markets in Toronto and Vancouver, was up 10.3 percent from April 2015.
Reporting by Andrea Hopkins Editing by W Simon