July marks sixth straight month of rise in existing home sales in Canada, CREA says

By , on August 27, 2014

Shutterstock photo
Shutterstock photo

TORONTO —The month of July saw the highest rise thus far since March 2010 of sales of existing in Canada, the Canadian Real Estate Association (CREA), the hub for real estate agents, said on Friday. The escalation marked the sixth straight monthly increase, coming out of a winter characterized by sluggish sales.

According to CREA, sales rose by 0.8% in July from June’s 0.6% increase. Actual sales for July 2014, on the other hand, rose 7.2% from July 2013.

Meanwhile, the home price index went up by 5.3% from July 2013. Homes sold in July went for an average of $401,585; a figure which increased 5% from July 2013.

A particularly harsh winter had an adverse effect on Canada’s housing market – with home-building, sales and property prices bearing the brunt of the negative impact– but real estate has thankfully sprung back to life this season, bolstered by current low mortgage rates.

Gregory Klump, CREA’s chief economist, said that: “Low mortgage interest rates continue to bolster home sales activity. With the Bank of Canada widely expected to hold interest rates steady until next year, mortgage financing will remain attractive over the second half 2014 and continue to support Canadian economic growth, while waiting for Canadian exports and investment to improve.”

“The true catalyst will be the next stage of the policy normalization process by the Bank of Canada, which we do not expect will happen until the second half of 2015,” Issa added.

Additionally, senior Canada macro strategist at TD Securities, Mazen Issa noted: “The (recent decline in mortgage rates) will prove to be the more important determinant over the rest of the year. While we do expect that higher rates will curtail housing market activity, the magnitude remains small.”