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Canadian existing home sales grow strongly in January, reverses December’s fall

Canadian existing home sales grew sequentially in January. Sales were up 3.6 percent, more than reversing December’s fall and marking the strongest monthly gain since June 2018. Sales came in higher in half of local markets, led by Montreal, Ottawa and Winnipeg.

In Vancouver, sales rose 1.2 percent sequentially, although this followed steep falls in November and December. Other markets in B.C. came in soft, with sales down in Fraser Valley, Victoria, and Okanagan-Mainline. On the contrary, sales rose in Vancouver Island after large falls in the prior two months.

In the oil producing provinces, performances came in mixed. Sales fell in Calgary and Edmonton but rose in Regina and Saskatoon. Sales rose 1.2 percent sequentially in Toronto after posting a slight rise in December. Excluding Toronto, sales rose 5.1 percent sequentially in Ontario, supported by London in addition to Ottawa.

Throughout the Atlantic Provinces, sales rose in New Brunswick and Nova Scotia while falling in PEI and Newfoundland and Labrador. National new listings rose 1 percent higher month-on-month in January, led by rising supply in Vancouver and Hamilton.

With sales growth outpacing new listing, the Canadian sales-to-new listings ratio tightened to 56.7 – strongly in balanced market territory and the highest since January of last year. Markets continue be oversupplied in B.C. and the oil-producing provinces. In Ontario, the ratio was at 62.2, climbing further into seller’s market territory and pointing to positive price growth going forward. The ratio came in at 52.8 in Toronto, almost unchanged from December. This signifies that markets outside of Toronto are considerably tighter, noted TD Economics in a research report.

On the contrary to sales, the average home price dropped 2.9 percent sequentially in January, and has now fallen in 4 of the past 5 months.

“On balance, today's report provides some evidence that households are weathering the rising interest rate storm. This should provide some comfort to the Bank of Canada, particularly with their recent emphasis on housing market developments helping shape interest rate policy. However, it will take more than one month of decent housing data to shift policymakers from their current patient stance, with the next rate hike likely to be delayed until late in 2019”, added TD Economics.

At 18:00 GMT the FxWirePro's Hourly Strength Index of Canadian Dollar was bearish at -80.3582, while the FxWirePro's Hourly Strength Index of US Dollar was neutral at -20.9176 more details on FxWirePro's Currency Strength Index, visit http://www.fxwirepro.com/currencyindex

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