Canadian home prices drop in December, says property association
Calgary and Edmonton lead declines as oil's fall hits demand in resource-reliant region
Sales of existing homes in Canada slumped in December, led by declines in Calgary and Edmonton, as tumbling oil prices hurt home buyer demand in the resource-dependent region of the country, the Canadian Real Estate Association said.
The industry group for Canadian real estate agents said that sales were down 5.8 per cent from November.
Actual sales for December, which are not seasonally adjusted, were up 7.9 per cent from December 2013.
The association's home price index rose 5.4 per cent from December 2013.
"Given the uncertain outlook for oil prices, it's no surprise consumer confidence in Alberta softened and moved some home buyers to the sidelines," Gregory Klump, the association's chief economist, said in the report.
"With regards to slower activity in Calgary and Edmonton, sales in these two markets had been running strong all year before they returned to levels that are entirely average for the month of December," Klump said.
Canada's housing market has roared ahead for more than five years.
However, analysts have repeatedly said they expect sales and homebuilding to slow as interest rates rise this year.
While some have said the market will crash like the United States market did in 2008, most predict a more gradual "soft landing".
The national sales-to-new listings ratio was 51.8 per cent in December, down from the mid-55 per cent range in the previous four months, the association noted.
There were 6.2 months of inventory nationally at the end of last month, up from 5.8 months in November, it said.
"Together with the softer reading for the sales-to-new listings ratio, this suggests that the Canadian housing market has become more balanced," the agency said.