Canadian existing home sales rise in November, likely to rise in 2020

Canadian existing home sales rose 0.6 percent in November. The number of local markets where sales rose versus fell almost evenly split. The data throughout regions came in mixed. In B.C. sales rose 5.7 percent, owing to strong rise in Vancouver. Since April, activity has risen in the GVA, underpinned by low mortgage rates, accelerating population growth and rising wages.

Activity in the Prairies came in mixed. Sales dropped in Alberta, whereas it fell sharply in Calgary.  The home sales data implies some weakness in Alberta’s economy in the month. Sales also fell in Saskatchewan. On the contrary, activity rose in Manitoba sequentially, and rose a healthy 12.5 percent year-on-year.

Sales rebounded in Ontario, rising 1 percent, reversing the prior month’s fall. On a year-on-year basis, the picture came in stronger, with sales rising 11.2 percent. Monthly gain on a sequentially was boosted by Toronto, where sales rose 1.6 percent in the month. In the GTA, year-on-year gains were seen throughout all structure types, especially single-detached units and townhomes.

Sales fell in Quebec after a strong rise in October. Nevertheless, they rose 12.3 percent year-on-year, stimulated by strong economic conditions.

The average home price rose 1.2 percent sequentially in November, the ninth consecutive gain. On a year-on-year basis, prices rose 8.4 percent, the fastest gain in over two years.

“We look for rising sales in 2020, consistent with job growth, population gains and a mild boost from government programs for first-time homebuyers. Of course, this view rests on financial conditions remaining accommodative. The backup in bond yields since September, if sustained, could offer some downside risk to our forecast”, said TD Economics in a research report.