CREA: Feb. home sales drop 16%

For February national home sales declined 2.1% from a month earlier while year-on year volumes were down 15.8%. The national average sale price was down 1% year-over-year in February. New listings were down 1.2% from a month earlier.

The MLS HPI rose 2.7% in February, but CREA notes that this was the tenth time in as many months that the year-on-year gain shrank and is the slowest rate of increase since March 2011. The index is based on data from Canada’s major real estate markets and adjusts for mix of sales.

The CREA said small declines in the very large markets of Greater Toronto and Montreal, as well as sharper declines in the large and medium markets of Greater Vancouver and Winnipeg, tipped the national balance to the downside.

Calgary remained a hot market, with an 8% year-on-year increase in the MLS HPI. Price growth moderated in Greater Toronto, up 3.2, year-on-year, and in BC’s Fraser Valley (up 0.4%). There was a slight acceleration in Greater Montreal (up 2.7%). Prices in the large Greater Vancouver market, where the MLS HPI slipped 3.3% year-on-year, put downward pressure on the broad index.

"A rebound in sales in some of Canada's largest and most expensive markets, similar to those we saw following previous mortgage rule changes, has so far remained elusive," CREA President Wayne Moen said in the press release. "That said, the slowdown in many big markets is being offset by activity in many smaller and more affordable markets that were less impacted by last year's mortgage rule changes.

CREA chief economist Gregory Klump noted that the year-over year decline was a reflection of demand that is well off from 2012, and could be expected due to last July’s tightening of mortgage rules. “Until we get well into the summer months, year-over-year comparisons to months in the first half of 2012 are predictably going to be down significantly but not necessarily be indicative of further deterioration,” Klump said.

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