Canada Existing Home Sales Edge Up 0.5% in March

By Robb M. Stewart

OTTAWA--Canada's real estate market was relatively steady last month, with sales of existing homes ticking higher, prices slipping modestly and new listings declining ahead of early signs of a rebound in April.

National home sales rose 0.5% from the previous month, the Canadian Real Estate Association said Friday. On a unadjusted basis, transactions in March were 1.7% above year-earlier levels.

The real-estate data indicated that benchmark house prices, calculated in a similar fashion to the S&P CoreLogic Case-Shiller National Home Price Index, edged down 0.3% from the prior month but were 0.7% ahead of a year ago.

New listings, meanwhile, fell 1.6% from the month before but the association said weekly tracking showed a bounce in new supply around the second week of March that led to an increase in sales in the final week of the month and a jump in listings in the first week of April.

"We'll have to wait for the April data to really understand how buyers are responding to all these new properties for sale, but if you look at last spring as a guide and add to that record population growth in the last year and a central bank that is far more likely to cut [interest rates] this summer than raise like it did last year, it could get interesting," said Shaun Cathcart, CREA's senior economist.

The pace of sales activity for existing homes in March was slower than in the previous two months, though the real estate association said that was in part a reflection of an inactive market over the long Easter weekend in Canada. Larry Cerqua, chair of CREA, said there is anecdotal evidence from late last month and early April to suggest activity is picking up.

Home sales have shown signs of recovering in recent months from a weak second half to last year.

Construction, which typically follows home purchases, rebounded in February after declines in the previous two months, driven by a jump in starts on multi-unit homes, though Canada Mortgage & Housing Corp. anticipates a decline in starts this year due to the lagged effect of higher interest rates on new construction. Prices for new homes also edged up in February from the prior month, the first increase in six months and driven by gains in a handful of cities, though prices fell slightly on the same month last year, separate Statistics Canada data showed.

CREA said that with sales ticking higher and new listings down last month, the national sales-to-new listings ratio tightened to 57.4%. That compares with a longer-term average of 55%--a reading of between 45% and 65% is seen as consistent with balanced housing-market conditions.

Write to Robb M. Stewart at robb.stewart@wsj.com

(END) Dow Jones Newswires

April 12, 2024 09:41 ET (13:41 GMT)

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