February's sales numbers accompanied a noticeable decline in housing starts, as well
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Amid weaker nationwide sales in February, the Canadian Real Estate Association is predicting national home sales activity this year to fall to its lowest levels since 2010.
Canada’s February housing sales shrunk by 4.4% on an annual basis, with a sharper 9.1% decline month-over-month.
Overall 2019 sales will contract by 1.6% to 450,400 transactions, CREA stated in its updated outlook for this year. Activity in 2020 is projected to slightly recover with a 2% gain to reach 459,400 sales, The Canadian Press reported.
The average nationwide sales price last month stood at $468,350, representing a 5.2% year-over-year decrease. Not including red-hot Toronto and Vancouver, this figure falls to just under $371,000.
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Mortgage rate hikes and a noticeable economic deceleration have contributed to weaker activity in new home construction, according to the Canada Mortgage and Housing Corporation.
The seasonally adjusted annual rate of housing starts fell to 173,153 units last month, considerably below January’s 206,809 and earlier predictions of 205,000 units.
“As a leading indicator of economic activity, February’s steep decline in housing starts may raise some eyebrows in Ottawa,” TD Bank senior economist Fotios Raptis said.
“Although housing starts seemed to be unscathed by the new B-20 regulations that took effect in January 2018, higher borrowing costs and tougher mortgage qualifying conditions may finally be taking a toll on new residential construction.”
