Canada’s housing market cooled for a second straight month in July, led by lower prices and sales in the country’s biggest city.
Sales dropped 0.4 percent nationally, compared with a month earlier, with the average price down 0.3 percent, the Canadian Real Estate Board said Friday from Ottawa. The number of homes sold in Toronto dropped 1.1 percent, with average prices falling 0.2 percent.
A real estate rally earlier this year in Canada’s priciest markets such as Toronto and Vancouver, fueled by lower interest rates, evoked warnings from the central bank and private economists that record household debt burdens may pose a risk to the financial system. Families vying for increasingly expensive homes is driving leverage to record levels, with debt at 163.3 percent of disposable income in the first quarter
Canada Mortgage & Housing Corp., the national housing agency, said in a report Thursday risks in the Toronto market are elevated because of near record levels of condominium construction in the city.
Over the past 12 months, Toronto home sales rose 7.4 percent and prices jumped 11 percent, according to CREA. Prices in Vancouver are up 7.7 percent since from a year ago, even with a 3.5 percent drop in July.