Canadian home re-sales fall sequentially in October

Canadian home re-sales dropped sequentially in the month of October. Sales were down 1.6 percent, the second consecutive monthly fall. Considerable falls were seen in Montreal, Edmonton, Hamilton and Halifax. Sales encouragingly rose in Vancouver, helping power a 1.4 percent monthly gain for the province overall.

Activity came in mixed in other parts of B.C., with sales higher in Vancouver Island and Okanagan-Mainline while falling in Fraser Valley and Victoria. National new listings fell 1.1 percent in October, dragged on by falls in the GTA, Calgary and Victoria.

With both sales and listings falling, the national sales-to-new listings ratio continued to be almost the same at 54.2 – representing the 9th consecutive in balanced territory. Provincially, ratios were highest PEI, New Brunswick and Quebec – indicating that conditions favour sellers in these markets. In the meantime, markets were balanced in Ontario and Manitoba.

Resale markets in some provinces continue to be oversupplied, with sales-to-listings ratios in B.C., Alberta, Saskatchewan and Newfoundland and Labrador continuing to be well below their 10-year averages in October. This should keep near-term price growth in check for these provinces. The average home price dropped in October while also falling on a year-on-year basis.

Sales dropped for the second consecutive month in October, hinting that the post B-20 bounce in activity observed from May to August has run its course. Increasing borrowing costs are restraining activity.

“From the perspective of overall economic growth, October's sales decline provides some offset from the earlier reported increase in starts”, stated TD Economics in a research report.

Policymakers might be happy with what has so far been an orderly deceleration in housing, with markets throughout the country generally balanced and prices rising at a more manageable rate.

“Looking ahead, we expect sales to grind modestly higher in coming years, supported by continued employment, income and population growth. However, rising borrowing costs, strained affordability in key markets, and tougher mortgage qualification rules will limit the extent of any realized improvement”, added TD Economics.

At 19:00 GMT the FxWirePro's Hourly Strength Index of British Pound was neutral at 45.6687, while the FxWirePro's Hourly Strength Index of US Dollar was slightly bearish at -51.9602. For more details on FxWirePro's Currency Strength Index, visit http://www.fxwirepro.com/currencyindex