Feb. 14 (Bloomberg) -- Canadian home sales fell for a fifth month in January on fewer transactions in Toronto and Vancouver, adding to evidence the nation’s housing market is cooling.
Sales declined 3.3 percent in January from the previous month, the Canadian Real Estate Association said today in a statement. The average price of a home sold in January rose 0.3 percent from the previous month and 9.5 percent from a year ago.
The report adds to recent data showing real estate has ceased to drive Canadian economic growth. Canada Mortgage & Housing Corp. reported Feb. 10 work on new home construction fell to the lowest in 12 months. The Bank of Canada forecast last month housing won’t add to output in 2014.
“Despite the gaudy price increases in January, we suspect that pricing power will eventually follow the sales lead,” said Doug Porter, chief economist in Toronto at Bank of Montreal’s BMO Capital Markets. “The old rule of thumb is that prices follow sales with about a six-month delay.”
CREA, based in Ottawa, cited cold weather for the drop in sales last month.
“A number of buyers likely waited out January’s deep freeze before going house hunting,” said Laura Leyser, president of association.
The number of homes sold in Toronto fell 4.2 percent in January from a month earlier, while the number of transactions in Vancouver were down 3.9 percent, the group said.
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