OTTAWA (Reuters) - Resales of Canadian homes fell 2.9 percent in April from March to the lowest level in more than five years, the Canadian Real Estate Association said on Tuesday.
The industry group said actual sales, not seasonally adjusted, fell 13.9 percent, while the group’s Home Price Index was up 1.5 percent from April 2017.
Canada’s once-hot housing market has cooled in recent months in response to rising interest rates and tighter mortgage rules - dubbed a stress-test - since January. While most economists expect a soft landing, some say there is a risk of a U.S.-style crash.
“The stress-test that came into effect this year for homebuyers with more than a 20 percent downpayment continued to cast its shadow over sales activity in April,” CREA President Barb Sukkau said in the report.
About 60 percent of local markets reported fewer sales, led by the Fraser Valley area of British Columbia, Calgary, Ottawa and Montreal.
A year ago, housing sales and prices were at or near record levels in many parts of Canada, but a series of regulatory changes, taxes on foreign buyers, tighter mortgage rules and rising interest rates have hampered demand, particularly in Toronto and Vancouver, the two largest markets.
The number of newly listed homes fell 4.8 percent in April to hit a nine-year low for the month, 12 percent below the 10-year monthly moving average, CREA said.
The national sales-to-new listings ratio firmed slightly to 53.7 percent from 52.6 percent in March. A ratio between 40 percent and 60 percent is considered a balanced market.
There were 5.6 months of inventory, the highest level since September 2015, CREA said.
Home prices are notching year-over-year price declines in several markets for the first time since the housing boom began nearly a decade ago. Prices in the Greater Toronto Area were down 5.2 percent from April 2017, while a still-hot condo market helped drive Greater Vancouver prices 14.3 percent higher compared to a year earlier.
The national average price for homes sold in April 2018 was just over C$495,000 ($383,453), down 11.3 percent from a year earlier, CREA said.
Reporting by Andrea Hopkins; Editing by Bernadette Baum