Canada home resales fall in April, lowest in over five years: CREA

FILE PHOTO: A woman walks towards a "for sale" sign of a home that has been sold in Toronto, Canada, June 29, 2015. REUTERS/Mark Blinch/File Photo

Resales of Canadian homes fell 2.9 percent in April from March to the lowest level in more than five years, the Canadian Real Estate Association said on Tuesday.

The industry group said actual sales, not seasonally adjusted, fell 13.9 percent, while the group’s Home Price Index was up 1.5 percent from April 2017.

Canada’s once-hot housing market has cooled in recent months in response to rising interest rates and tighter mortgage rules – dubbed a stress-test – since January. While most economists expect a soft landing, some say there is a risk of a U.S.-style crash.

“The stress-test that came into effect this year for homebuyers with more than a 20 percent downpayment continued to cast its shadow over sales activity in April,” CREA President Barb Sukkau said in the report.

About 60 percent of local markets reported fewer sales, led by the Fraser Valley area of British Columbia, Calgary, Ottawa and Montreal.

A year ago, housing sales and prices were at or near record levels in many parts of Canada, but a series of regulatory changes, taxes on foreign buyers, tighter mortgage rules and rising interest rates have hampered demand, particularly in Toronto and Vancouver, the two largest markets.

The number of newly listed homes fell 4.8 percent in April to hit a nine-year low for the month, 12 percent below the 10-year monthly moving average, CREA said.