Canadian realtors recorded their biggest sales gain in almost four years last month, the Canadian Real Estate Association said today, as the industry rebounds from the impact of a difficult winter.
Home sales rose 5.9 percent in May from April, the Ottawa-based agency said. The average price of a home sold in May climbed 7.1 percent from a year earlier, it said.
The gain is the fourth consecutive recorded by the nation’s realtors, following four straight declines during a colder-than-normal winter across much of the country. The Bank of Canada said last week there’s an elevated risk of a sharp correction in the country’s housing market.
“Had it not been for such a brutal winter that delayed the launch of the spring market, the improvement in new listings and sales would likely have been more spread out over the past few months,” Gregory Klump, the real estate association’s chief economist, said in a statement.
Today’s data follows a June 9 report by Canada Mortgage & Housing Corp., the country’s housing agency, that showed new home building in May was at the strongest level in seven months.
Bank of Canada Governor Stephen Poloz said June 12 the main domestic risk in Canada is “stretched valuations and some signs of overbuilding” in the nation’s real estate. Canada’s housing market has continued to show strength even with the government tightening mortgage-lending rules.
“We’re looking towards a soft landing,” Finance Minister Joe Oliver told reporters today. “We don’t believe we’re in a bubble situation.”
Housing was one of the industries that suffered as a result of colder-than-usual temperatures this winter. The first three months of the year saw home building have its biggest quarterly decline since the recession, according to Gross Domestic Product data released May 30 by Statistics Canada.
The industry has since rebounded.
Gains for realtors were broad-based in May, with sales in Toronto, the country’s largest market, rising 5.8 percent. Transactions in Vancouver were up 2.6 percent, and 4.3 percent higher in Montreal. About 80 percent of markets recorded gains in sales, the Canadian Real Estate Association said.
“Over the past 25 years, that widespread a monthly sales increase has been recorded only a handful of times,” Beth Crosbie, the agency’s president, said in the statement.
Price increases during the month were more muted, rising 0.8 percent in May.
CREA also updated its forecast for home sales and prices for this year and next. Sales should increase 1.2 percent in 2014, the association said in a separate statement, down from 1.3 percent forecast in May. Sales should rise 0.9 percent in 2015, according to CREA.
The average national home price is forecast to jump 5.7 percent this year to C$404,300 ($372,250), and rise another 0.7 percent next year to C$407,300, CREA said.