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Canada Home Sales Fall Adds to Market Slowing Evidence

Nov. 15 (Bloomberg) -- Canadian existing home sales slipped in October from the previous month while prices were little changed on the year, adding to evidence of a cooling in the country’s real estate market, a realtor group said.

Sales fell 0.1 percent during the month to 36,492 units, the Canadian Real Estate Association said in an e-mailed statement. Home sales fell 0.8 percent from the same month last year.

The country’s housing market has been cooling as markets in British Columbia tumbled from records and policy makers took measures to tighten mortgage lending amid concern that a bubble was building in cities such as Toronto. Finance Minister Jim Flaherty toughened rules on government-insured mortgages in July for the fourth time in four years, while the Office of the Superintendent of Financial Institutions, the country’s federal banking regulator, also introduced stricter standards for mortgage lenders.

“Little has changed since national activity geared down in the wake of mortgage rules that came into force in July,” Gregory Klump, the realtor group’s chief economist, said in the statement.

Monthly sales are down 5.4 percent since June, according to the association’s data.

The average national price for existing homes was little changed from a year earlier, and rose 0.1 percent from September to C$363,299 ($362,900).

The Canada Mortgage & Housing Corp. reported Nov. 8 that housing starts fell 8.9 percent in October. The country’s central bank forecast that housing investment, which helped lead Canada out of recession in 2009, will become a drag on growth next year and in 2014.

The real estate market in Victoria, the capital of British Columbia, led declines in October with a 26 percent plunge in home sales, even as other markets in the province such as Vancouver recorded gains. Toronto, the largest market, posted a 1.5 percent rise in sales while Montreal was down 0.5 percent.

To contact the reporters on this story: Andrew Mayeda in Ottawa at amayeda@bloomberg.net; Theophilos Argitis in Ottawa at targitis@bloomberg.net

To contact the editor responsible for this story: Chris Wellisz at cwellisz@bloomberg.net

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