* Sales of existing homes off 0.01 pct in July from June
* Homes newly listed for sale down 3.3 pct from June
* Average prices down 2 pct from a year earlier
By Claire Sibonney
TORONTO, Aug 15 (Reuters) – Sales of existing homes in
Canada steadied in July from June and prices were down 2 percent
on average from a year earlier, the Canadian Real Estate
Association said on Wednesday, another sign that a long real
estate boom is starting to slow.
The industry group for Canadian real estate agents said July
sales were off 0.01 percent from June, and the number of homes
newly listed for sale dropped 3.3 percent. Sales were up 3.3
percent from a year earlier.
CREA said the local markets that it tracks across the
country were about evenly split between those that saw gains
from June and those that saw declines.
The data showed sales and prices cooling in Toronto and
Vancouver, two of the country’s hottest markets.
Vancouver prices were down 12.2 percent year-on-year.
The latest statistics were the first since the government
tightened mortgage rules last month in an effort to rein in the
market.
“Some first-time home buyers may have difficulty qualifying
for mortgage financing due to shortened amortization periods
included in recent changes to mortgage regulations,” said
Gregory Klump, CREA’s chief economist.
“As the lynchpin of the housing market, lower first-time
buying activity will have knock-on effects over the rest of the
market. It will likely take more time for move-up buyers to sell
their current home.”
CREA President Wayne Moen said the data released on
Wednesday confirms expectations that the new mortgage rules
would temper sales and prices in Greater Toronto and Greater
Vancouver.
The national average price for homes sold in July was
C$353,147, down 2 percent from a year earlier. CREA said average
prices were up in about 70 percent of local markets, but lower
prices in Greater Vancouver continue to impact the national
average.
The data was in line with a report from Canada’s federal
housing agency o n Tuesday t hat said the country’s robust housing
market is expected to soften over the next few months and into
2013, with a slowdown in the pace of housing starts.
Canada did not experience the housing market crash during
the financial crisis that helped push the United States and
other Western countries into recession.
While the Canadian market did pull back in 2008, it
rebounded swiftly on the back of low interest rates. The boom,
however, has worried policymakers, who fear the formation of an
asset bubble.
Many economists and realtors believe the soft landing that
policymakers have sought to engineer is starting to take shape,
despite interest rates remaining near record lows.
The slowdown comes after a robust, three-year climb in
Canadian home prices and booming construction of condominiums.