Canada | Home sales fell in March but prices rose

(OTTAWA) Home sales in Canada were lower in March, but prices rose 11.2 percent compared to the same month last year, the Canadian Real Estate Association (CREA) said on Tuesday.

Posted at 11:05 am
Updated at 3:40 p.m

Sales fell 16.3% from a year ago when they hit a record high, ACI said.

On a monthly basis, seasonally adjusted home sales fell 5.4% in March.

According to TD Bank economist Rishi Sondhi, part of the decline in March likely reflected to some extent buyer fatigue after several months of robust activity as buyers ramped up their buying ahead of the rate hike.

The Bank of Canada raised interest rates by a quarter of a percentage point in early March and another half of a percentage point last week. These decisions have pushed up banks’ interest rates because they use the central bank’s policy rate as a benchmark when setting variable mortgage rates.

Five-year fixed-rate mortgage rates have also risen in recent weeks, as have Canadian government five-year bond yields.

“And with the Bank of Canada poised to aggressively raise interest rates, home sales are likely to continue to decline,” Sondhi wrote in a report.

“This should help balance the market and weigh on property price growth. In fact, our forecasts assume a significant slowdown in average property price growth in the second half of the year. »

The decline in the number of transactions came as the number of new listings for sale fell 5.5% monthly in March.

That decline in new registrations was largely due to declines in Greater Vancouver, Fraser Valley, Calgary and Greater Toronto, CREA said.

The national price for homes sold was $796,068 in March, compared to $715,696 for the same month in 2021. With the exception of the Vancouver and Toronto metropolitan areas, two of the most active and expensive real estate markets, the national median price for the past month is instead around $633,000.

Royal LePage revised its forecast upwards

In a separate study released on Tuesday, real estate agency Royal LePage reported that total home prices nationwide rose 25.1% year over year to $856,900 in the first quarter. This is the largest first-quarter profit on record since the company began surveying these prices.

Phil Soper, CEO of Royal LePage, said the real estate company expects a strong first half of 2022, after which real estate markets will weaken.

“However, the first quarter of the year was so strong that we had to raise our guidance for 2022,” Soper said in a statement.

“Furthermore, property prices will continue to rise in the coming months as the imbalance between insufficient supply and strong demand persists. »

Royal LePage now forecasts that the total price of a property in Canada will increase by 15.0% in the fourth quarter compared to the same quarter in 2021. In its previous forecast, the expected growth was 10.5%.

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