Posthaste: Cooling housing market could spur Bank of Canada to cut rates sooner, says economist
Signs that housing market sentiment in Canada is heading south fast came in the latest real estate numbers out Friday.
Canadian home sales fell 1.9 per cent in September from the month before while new listings jumped 6.3 per cent, according to data released by the Canadian Real Estate Association.
The decline in sales was widespread with only a few markets showing gains, said Royal Bank of Canada economists Robert Hogue and Rachel Battaglia in a report on the data.
Even Calgary, the nation’s hottest housing market, posted its first decline in six months.
The biggest retreat of major markets was in Vancouver, said RBC, where home sales fell 5.6 per cent from the month before. While Toronto home sales fell just 1.8 per cent in September, they are now down 22.4 per cent since the spring peak, exceeding Vancouver’s 13.7 per cent slide.
Smaller markets in Ontario took even bigger hits, with sales down 14.5 per cent in the Niagara region and 7 per cent in the Hamilton-Burlington area.
Canada’s housing market has now given back almost 40 per cent of the sales gains it made from January when the Bank of Canada first paused interest rates until June, when it resumed hiking, said Desjardins’ principal economist Marc Desormeaux.
“Despite pockets of strength, it’s clear that Canadian housing market sentiment has soured meaningfully since the spring,” he said.
Home prices are also down for the first time since March with the aggregate MLS Home Price Index slipping 0.3 per cent in September from the month before.
Stephen Brown of Capital Economics said the fall in prices shows how quickly conditions have shifted and the plunge in the sales-to-new-listings ratio suggests more weakness ahead.
“Renewed house price declines are another
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