Canadian home sales drop 14.5% from December to January as new mortgage rules kick in

Home sales nationwide dropped by 14.5 per cent in January compared to December, the Canadian Real Estate Association (CREA) said on Thursday.

The seasonally adjusted average price of residential property slipped 2.4 per cent over the period, from $513,519 in December to $501,040 in January. Home prices, though, were still up 2.3 per cent compared to January of 2017.

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Economists and real estate professionals had largely anticipated a significant pullback in home sales in January, after home buyers and sellers hurried to finalize property purchases before Jan. 1, when new, stricter federal mortgage rules came into effect.

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The rules likely also contributed to a sharp drop in the supply of home for sales in January. New listings plunged 21.6 per cent during the first month of 2018, the lowest level since the spring of 2009.

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The limited availability of properties for sale “prevented market balance from shifting in favour of homebuyers,” CREA chief economist Gregory Klump, said in a statement.

CREA said sales activity decreased in three-quarters of all local markets in Canada and most of the large declines came from the Greater Toronto Area and nearby regions in southern Ontario.

– With a file from the Canadian Press