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Canada’s average home price drops 5% in February compared to year ago

A real estate sold sign is shown outside a house in Vancouver, Tuesday, Jan.3, 2017. THE CANADIAN PRESS/Jonathan Hayward

Canadian home sales fell 16.9 per cent in February, while the national average sale price dropped five per cent, compared to a year earlier.

New monthly numbers from the Canadian Real Estate Association also show that national home sales declined 6.5 per cent from January to February, the second consecutive monthly decline and the lowest reading in nearly five years. Sales were down in almost three quarters of all local housing markets, but there were large monthly drops in the Greater Vancouver and Greater Toronto areas, CREA says.

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These declines confirm that many homebuyers moved their purchase decisions forward to late 2017, in a bid to secure mortgages before tighter lending rules took effect in January, said Gregory Klump, CREA’s chief economist.

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Other factors, though, are contributing to slowdown, Robert Kavcic, senior economist at BMO Capital Markets wrote in a research note shortly after the release.

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“The housing market is more broadly adjusting to stricter mortgage rules, Bank of Canada rate hikes, some provincial policy moves and broken speculative psychology around Southern Ontario,” he wrote.

The national average house price for homes sold in February 2018 was just over $494,000, down five per cent from a year earlier. But excluding Toronto and Vancouver, the country’s most active and most expensive markets, the national average price was just under $382,000, up 3.3 per cent from $369,728 a year ago.

– With a file from Global News national online money reporter Erica Alini