Canada

Friday, February 14, 2020 - 10:11

MNI DATA REACT: Tight Canada Housing Supply Boosts Prices


By Greg Quinn

OTTAWA (MNI) - Canada's housing market remained tight in January with average prices rising the most since mid-2016 and measures of the inventory of properties for sale the lowest in more than a decade.

The average price of $504,350 was up 11.2% from a year earlier, the Canadian Real Estate Association said Friday from Ottawa. The Toronto area is among the hottest markets while declines in Vancouver are fading, with quality-adjusted prices in both cities up more than 50% from five years ago.

The return of housing market strain is a big reason the BOC is reluctant to cut the G7's highest interest rate of 1.75%, because faster growth now could come at the expense of a bigger setback down the road. Toronto and Vancouver markets have surged and it's unclear how much is being fed by rising populations and incomes versus speculators. The gains come after regulators imposed a tougher stress test on new mortgage loans.

"Barring an unforeseen change in recent trends between the balance of supply and demand for homes, price gains appear poised to accelerate in 2020," the CREA report said.

The 4.2-month inventory of homes for sale was unchanged from December at the lowest since mid-2007. That's a full month below the long average. The total number of new listings was little changed near the lowest in a decade.

The biggest sales decline in about a year of 2.9% in January did little to shift the balance of power between buyers and sellers, CREA said. Sales rose 11.5% from a year earlier including a 43% jump in Vancouver.

--MNI Ottawa Bureau; +1 613-314-9647; email: greg.quinn@marketnews.com

[TOPICS: MACDS$,M$C$$$]

Please log in to read and leave comments