OTTAWA – Canadian home sales were up from a year ago in December, but slid lower compared with the previous month for the third consecutive time, the Canadian Real Estate Association says.
The industry association said Wednesday that the number of sales last month was up 12.9 per cent compared with December 2012, and the national average price was up 10.4 per cent to $389,119.
However the December’s sales, through the multiple listing service, were down 1.8 per cent from November, continuing a downward trend that began with CREA’s October report.
“Activity has gradually eased back from stronger than expected levels last summer and is now roughly in line with the 10-year monthly average,” CREA president Laura Leyser said.
“We’ll likely continue getting mixed signals in the months ahead, with positive year-over-year comparisons for sales masking the recent moderation in the monthly sales trend.”
For the full year, there were 457,893 homes sold through the MLS system, up eight-tenths of a per cent from 2012.
Economists and policy-makers have been scrutinizing the Canadian housing market for indications of weakness and warning signs of a possible crash.
However, BMO senior economist Robert Kavcic said it was hard to find evidence to suggest anything by a soft landing for the market.
“Look for current balanced conditions and somewhat higher interest rates to lead to steady sales this year, with price growth tucked neatly below the rate of income growth,” Kavcic said.
TD economist Diana Petramala noted that some of the weakness in December may have been due to the freezing weather.
“However, higher mortgage interest rates appear to be taking some steam out of home demand, particularly for first time homebuyers,” Petramala wrote in a report.
“Five-year mortgage rates have risen by 70 basis points since May. Going forward, a continued increase in longer term interest rates will offset improving economic conditions, helping to keep home sales stable in 2014 and 2015.”
While home sales in December were down compared with November on a national basis, roughly 60 per cent of the local markets across the country saw lower sales.
Declines in Calgary, Edmonton and Toronto more than offset gains in Vancouver, the Fraser Valley and St. Catharines, Ont.
Meanwhile, the number of newly listed homes fell 4.3 per cent on a month-over-month basis in December.
The national sales-to-new listings ratio climbed to 55 per cent in December compared to 53.6 per cent in November.