Canadian home sales fell for the first time in six months as the Bank of Canada’s resumption of its rate-hiking campaign started to dampen the market’s nascent rebound.
(Bloomberg) — Canadian home sales fell for the first time in six months as the Bank of Canada’s resumption of its rate-hiking campaign started to dampen the market’s nascent rebound.
The number of homes trading hands in Canada fell 0.7% in July from the month before, the first decline in transactions since January, according to seasonally adjusted data released Tuesday by the Canadian Real Estate Association.
But a persistent shortage of homes for sale kept inventory tight, pushing benchmark prices up 1.1% to C$754,800 ($561,000) from the previous month, the data show.
Canada’s central bank raised its benchmark interest rate in both June and July as the country faced a stubbornly high rate of inflation and an unexpectedly strong rebound in its housing market.
Canada is grappling with a persistent mismatch between its immigrant-driven population growth and the much slower pace of new home construction, putting upward pressure on prices.
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In July, the number of homes being put on the market rose 5.6% from the previous month, the real estate association data show.
This helped the sales-to-new listings ratio, one measure of market tightness, ease to 59.2%, indicating a loosening of conditions.
Months of inventory — another measure of supply and demand estimating how long it would take the market to work through all the current listings given the pace of sales — rose to 3.2 from 3.1 in June.
Still, that measure remained below its long-term average and was a full month below where it was at the beginning of this year, the real estate board said.
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