Home sales in Canada dropped sharply in January to their lowest monthly level in three years amid a retreat in listings as new mortgage rules came into place, according to a new report from a national real estate group.
The Canadian Real Estate Association (CREA) said today that home sales through the Multiple Listing Service (MLS) declined by 14.5 per cent from December to January this year.
CREA said that the December sales hit the highest monthly level on record, citing a “pull-through” of transactions as buyers rushed to get deals done in advance of the new mortgage rules kicking in on Jan. 1.
The group said many of the biggest sales declines were seen in Ontario’s Greater Golden Horseshoe markets, where sales rose late last year following the announcement of the tighter mortgage rules.
Conversely, sales were up year over year in B.C.’s Lower Mainland and Vancouver Island, the Okanagan Region, Edmonton, Montreal, Greater Moncton and Halifax-Dartmouth.
CREA also reported the number of newly listed homes plunged 21.6 per cent to reach the lowest level since the spring of 2009.
The group said new housing supply dropped in about 85 per cent of all local markets, led by a decline in the Greater Toronto Area.Vancouver sales were off by 10.5 per cent in January.
TD economists Michael Dolega and Rishi Sondhi said in report that the country’s economic growth and improving job market is expected to support the housing market in the medium term.
However, they added that the new mortgage underwriting rules, higher interest rates, and an elevated supply pipeline will put some downward pressure on sales activity and prices.