Canadian home sales see biggest monthly decline since 2010

Canadian home sales see biggest monthly decline since 2010

Total sales volumes (not seasonally adjusted) were 11.4% below the level seen in June of 2016.

That decline was influenced by cooled demand in the Greater Golden Horseshoe Area following Ontario's unveiling of its Fair Housing Plan, according to the Canadian Real Estate Association.

New home prices in Canada continued to increase month-on-month in May, led by growth in Toronto and Vancouver, according to the latest figures.

In June, sales were down in 70 per cent of local markets from the previous month, including all markets in Ontario's Greater Golden Horseshoe, British Columbia's Lower Mainland, Kingston, Montreal and Quebec City.

"The recent increase in interest rates could reinforce a lack of urgency to purchase or, alternatively, move some buyers off the sidelines before their pre-approved mortgage rate expires", he added.

The Bank of Canada raised its benchmark interest rate last week by a quarter-percentage point to 0.75%, and its commentary suggests more rate increases are likely in the offing.

However, Porter and Kavcic say the national average price is skewed as its weight is dominated by Toronto's slowing but elevated activity.

Canadian households are carrying record levels of debt, with borrowing climbing at a roughly 6% pace from a year ago.

On an average-price basis, the cost of buying a home in Canada in June edged 0.4% upward to 504,000 Canadian dollars ($400,000) - although when the Toronto and Vancouver markets are excluded, the average price comes in just shy of C$400,000.

The latest home price data came the day after the Bank of Canada raised interest rates for the first time in almost seven years.

While the slowdown in Toronto and area sales pulled down the national real estate activity.

With sales having also declined in April and May, activity in June came in 14.1 per cent below the record set in March.

Nationally, the market is considered balanced, with a sales-to-new listings ratio of 52.8%.